Philip "Phil" Arthur Fisher (September 8, 1907 – March 11, 2004) was an American investor and author. Look at the analysts around you. Although few of them are living in downright squalor, most do not seem quite so financially well off as should be warranted by taking full advantage of the unusual field in which they are working. Therefore should we conclude (1) analysts are a bunch of dumbbells, or (2) it is impossible to do what most of them are attempting, which is possibly a polite way of saying they are a bunch of charlatans, or (3) there are fundamental errors in the methods of approach used by sizable numbers of them, which errors of method prevent them from accomplishing the results that their basic intelligence would otherwise attain? (1954). "Why do not financial analysts make more money?". Financial Analysts Journal 10 (2): 65-67. After one year in Stanford's then brand-new Graduate School of Business Administration, I entered the business world in May 1928, I went to work for, and twenty months later was made head of, the statistical department of one of the main constituent units of the present Crocker-Anglo National Bank of San Francisco. Under today's nomenclature I would have been called a security analyst. ... On March first 1931, I started Fisher & Co. which, at that time, was an investment counseling business serving the general public with its interests centered largely around a few growth companies. This activity prospered. Common Stocks and Uncommon Knowledge. 1997. pp. vii–viii. (1st edition, 1958, Harper & Brothers) In its letter of December 1956, the First National City Bank of New York furnished a table showing the worldwide nature of the depreciation in the purchasing power of money that occurred in the ten years from 1946 to 1956. ... Of course, these figures are only conclusive for this one ten-year period. They do indicate, however, that these conditions are worldwide and therefore not too likely to be reversed by political trends in one country. What is really important concerning the attractiveness of bonds as long-term investments is whether a similar trend can be expected in the period ahead. It seems to me that if this whole inflation mechanism is studied carefully it becomes clear that major inflationary spurts arise out of wholesale expansions of credit, which in turn result from large government deficits greatly enlarging the monetary base of the credit system. The huge deficit incurred in winning World War II laid such a base. The result was that prewar bondholders who have maintained their positions in fixed-income securities have lost over half the real value of their investments. 1997 edition. pp. 9–11. 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 those who in one way or another are concerned with any particular company. Most people, particularly if they feel there is no danger of their being quoted, like to talk about the field of work in which they are engaged and will talk rather freely about their competitors. Go to five companies in an industry, ask each of them intelligent questions about the strength and weakness of the other four, and nine times out of ten a surprisingly detailed and accurate picture of all five will emerge. However, competitors are only one and not necessarily the best source of informed opinion. It is equally astonishing how much can be learned from both vendors and customers about the real nature of the people with whom they deal. Research scientists in universities, in government, and in competitive companies are another fertile source of worthwhile data. So are executives of trade associations. 1997 edition. p. 17. What are these matters about which the investor should learn if he is to obtain the type of investment which in a few years might show him a gain of several hundred per cent, or over a longer period of time might show a correspondingly greater increase? In other words, what attributes should a company have to give it the greatest likelihood of attaining this kind of results for its shareholders? 1997 edition. p. 19. From time to time, fundamental changes of great investment significance affect large groups of common stocks. Usually for some time after these new influences are felt, the great majority of the investment community have little appreciation of their true importance. Then as the real significance of what has happened dawns, a spectacular change occurs in the market price of the affected securities. Fortunes are sometimes made by those who appreciated the significance of what was happening early—before it was importantly reflected in changed quotations for individual stocks. Paths to Wealth through Common Stocks. 2007. p. 1. (1st edition, Prentice-Hall, 1960) The first and probably the most important thing for the investor to recognize about inflation is this: As long as the overwhelming majority of Americans maintain firmly held existing opinions concerning the duties and obligations of their government, more and more inflation is inevitable. ... Why is more inflation so sure to come? Because under the economic system we have established the seeds of inflation sprout not in times of prosperity but in times of depression About eighty per cent of our federal revenue is derived from corporate and individual income taxes. The base source of federal funds is notoriously sensitive to the level of general business. It shrinks sharply on even moderate downturns in the general economy. However, this is not all that happens when general business gets bad. We have enacted laws, including unemployment insurance and farm relief, which make make mandatory a sharp increase of government payments in just these same periods of bad business when federal income is lowest. Furthermore, these laws already on the statute books are almost certainly but the smallest part of the special outpouring of government money that would occur when a truly severe depression might develop. 2007 edition. p. 4. Above all, dividend policy should always be clear, consistent and rational. A capricious policy will confuse owners and drive away would-be investors. Phil Fisher put it wonderfully 54 years ago in Chapter 7 of his Common Stocks and Uncommon Profits, a book that ranks behind only The Intelligent Investor and the 1940 edition of Security Analysis in the all-time-best list for the serious investor. Phil explained that you can successfully run a restaurant that serves hamburgers or, alternatively, one that features Chinese food. But you can’t switch capriciously between the two and retain the fans of either. Warren Buffett, Chairman's Letter - 2012. Berkshire Hathaway (March 1, 2013). ... Throughout my career, people have asked me why I don't do things more like my father did or why I don't do things more like Mr. Buffett. The answer is simple. I am I, not them. I have to use my own comparative advantages. I'm not as shrewd a judge of people as my father and I'm not the genius Buffett is. ... I guarantee that you cannot be Warren Buffett no matter what you read or how hard you try. You have to be yourself. That is the greatest lesson I got from my father, a truly great teacher at many levels—not to be him or anyone else, but to be the best I could evolve into, never quitting the evolution. Kenneth L. Fisher, in: Introduction by Kenneth L. Fisher, Hagstrom, Robert G. (2004). The Warren Buffett Way (2nd ed.). p. xxiii. Wikipedia has an article about: Philip Arthur Fisher
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