Philip A. Fisher

Philip A. Fisher

The father of Kenneth Fisher, Philip A. Fisher is best known for three books: Common Stocks and Uncommon Profits, Conservative Investors Sleep Well and Developing an Investment Philosophy. The back then San Francisco-based investor started the money management firm Fisher & Co., which he ran from 1931 until his retirement in 1999. During his career, he was known for garnering for his clients very high returns on investment while remaining relatively obscure to many in the financial world.

Summary

Warren Buffett claims that Fisher greatly influenced his own philosophy of investing. The California investor Fisher believed in finding long-term investments at reasonable prices. This meant finding innovative companies that were changing the market. His most famous investment was Motorola, a company he invested in back in 1955 and held until his death in 2004. When asked the best time to sell a stock, he responded with “almost never”. With his focus on companies in the technology field and long-term holdings, Fisher was a father of growth investing. Those wishing to use his strategy should also read his book Common Stocks and Uncommon Profits, specifically the chapter ‘Fifteen Points to Look for in a Common Stock’, which provides the foundation for identifying well-managed companies with growth prospects.

Success Formula Uncommon Profits

  1. MktCapM is >= US$ 600 million (basis year 2000) adjusted yearly
  2. Average 5y Sales Growth Rate % > industry median
  3. TTM Pre-tax profit margin > industry median
  4. Minimum 5y Pre-tax profit margin growth % > industry median
  5. Median 5y Pre-tax profit margin growth % > industry median
  6. TTM Sales Growth Rate % > 0
  7. Minimum 5y Sales Growth Rate % > 0
  8. 0 <= PEG ratio <= 0.5

Hypothetical performance back-tested

Data source: Bloomberg, Calculations: meetinvest

Disclaimer

Hypothetical performance is not necessarily indicative of future results. No representation is being made that any action will achieve profits or losses similar to those displayed. The result may be overstated as neither transaction costs nor bid/ask spreads nor slippage have been considered. Output equally weighted with maximum 5% allocation per position and rebalanced monthly. Holdings are systematically replaced when the screening criteria are not met anymore. No additional buying or selling rules (technical analysis) have been employed.

Historical monthly relative performance

How to read this graph:
A green bar shows how much the guru strategy outperformed the benchmark index in a particular month. A red bar shows how much the guru strategy underperformed the benchmark index in a particular month.

Data source: Bloomberg, Calculations: meetinvest

Disclaimer

Hypothetical performance is not necessarily indicative of future results. No representation is being made that any action will achieve profits or losses similar to those displayed. The result may be overstated as neither transaction costs nor bid/ask spreads nor slippage have been considered. Output equally weighted with maximum 5% allocation per position and rebalanced monthly. Holdings are systematically replaced when the screening criteria are not met anymore. No additional buying or selling rules (technical analysis) have been employed.

Historical portfolio turnover

Data source: Bloomberg, Calculations: meetinvest

Books

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