Mar 10, 2010|
The Philip Fisher Series: An Introduction
Investing wisely in the stockmarket over the span of one's lifetime is most certainly not an easy task. The field of investing is vast, dynamic and complex. Further, not only individual companies, but also the environment in which they operate is ever changing. Sometimes, these changes are slow. Some other times, the speed with which these changes occur take everyone by surprise.
It is not surprising then that many, both lay and professional investors, frequently find themselves lost when it comes to handling investments over the long term. This more often than not occurs due to the lack of a framework for making investing decisions. When things are changing so quickly, it probably is wisest to have a sound and solid framework through which everything can be viewed. Such an immutable mental framework can be extremely useful for an investor, and act as his anchor in a tumultuous stockmarket characterised by unexpected booms and busts.
The next logical question that arises is - how does one go about creating such a framework?
What better way to do that than to turn to the masters of the investing world. These are investors who have learnt to successfully navigate the rough seas of finance over very long periods of time. They have not only survived, but thrived in the stockmarket, making returns that comfortably beat the overall markets for decades on end.
In a bid to bring to you the ideas and perspectives of such investing gurus, starting today, we shall start a series on presenting to you some of the most insightful thoughts of growth investing ace Philip Fisher. We hope this series contributes towards helping you build your very own investing framework. We also hope that it helps expel many flawed ideas and investment notions that many small investors inadvertently pick up along the way. These can prove very expensive over the long run.
Before we start off with the first article of the series, a short introduction of Philip Fisher is in order.
Philip A Fisher (1907-2004) is considered to be a legend in the field of growth investing. In very basic terms, he espoused buying extremely good quality companies and holding on to them for their long term growth in earnings. According to him, if an investor did his work properly in choosing the right company that met all his criteria, the time to sell was almost never. Just what would be considered to be a 'good' company, and how an investor should go about choosing one will be the major subject matter of this series.
Warren Buffett too is self-confessedly heavily influenced by Philip Fisher. He is famously know to have said that his investing methodology is 85% Benjamin Graham and 15% Philip Fisher. While it may not be very practical to make such a clinical distinction within one's overall investing methodology, Buffett says that he is "an eager reader of whatever Phil has to say".
We are confident that you will find yourself in a similar position as you get exposed to Fisher's indispensable ideas through the medium of this series.
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