The Hindu Business Line : Investment Nuggets

You could call Philip Fisher as the stock market's first `tech investor'. His seminal contribution to the field of growth investing is his book Common Stocks and Uncommon Profits, originally published in 1958, which broke new ground in explaining to a whole new generation of investors on how they could go about evaluating and selecting fast-growing, innovative companies. Fisher used his techniques to pinpoint the likes of Motorola and Texas Instruments in the mid-1950s, two stocks that registered substantial gains over the following decades.

When compared to many other stock market greats, Fisher's philosophy is notable for its near-total focus on qualitative matters. An ardent advocate of the long-term buy and hold, Fisher spent little time worrying about traditional valuation measures and in-depth number crunching.

"Finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colourful practice of trying to buy them cheap and sell them dear".

"I became impressed both with the people (at Motorola) and with Motorola's position in the mobile communications business, where an enormous potential seemed to lie; whereas the financial community was valuing it as just another television and radio producer."

"The business grapevine is a remarkable thing. It is amazing what an accurate picture of the relative points of strength and weakness of each company in an industry can be obtained from a representative cross-section of the opinions of those who in one way or another are concerned with any particular company."

"The investor cannot pinpoint just how much per share a particular company will earn two years from now... (but) he should come pretty close to judging whether a sizeable increase in average earnings is likely to occur a few years from now. But just how much increase, or the exact year in which it will occur, usually involves guessing on enough variables to make precise predictions impossible. Under such circumstances, how can anyone say with even moderate precision just what is overpriced for an outstanding company with an unusually rapid growth rate? If the growth rate is so good that in another ten years the company might well have quadrupled, is it really of such great concern whether at the moment the stock might or might not be 35 per cent overpriced? That which really matters is not to disturb a position that is going to be worth a great deal more later."

"In the field of common stocks, a little bit of the great many can never be more than a poor substitute for a few of the outstanding... the ability to see through some majority opinions to find what facts are really there is a trait that can bring rich rewards," ("The investor should ignore the scare psychology of the moment and definitely begin buying").

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