The investor library

Philip Fisher

1907-2004 · Fisher & Co. · Go and ask.

Overview

Invested from 1931 to the 1990s and held for decades rather than years — he bought Motorola in 1955 and still owned it when he died. He argued, half a century before it was fashionable, that the facts which decide an investment are mostly qualitative and almost never in the accounts.

Background

San Francisco. He enrolled in the first class of what became Stanford's business school in 1928 and left before finishing to work as a securities analyst. In 1931 — in the depths of the Depression, and by his own reasoning precisely because nobody had any business worth losing — he set up on his own.

Fisher & Co. ran for about seventy years. He kept perhaps a dozen clients, never marketed, never published returns and rarely gave interviews. His son Ken went on to build a far larger and far more public business.

Style, and how it evolved

Scuttlebutt. Go and ask. Talk to a company's customers, its suppliers, its competitors and its former employees, and take seriously what they say about it when they have no reason to flatter it. Competitors, he argued, are the best single source: they will tell you honestly what a rival does better, because they have been losing to it.

Fifteen points. His checklist for a common stock, and notably almost none of it is financial: does research spending turn into products; is there a sales organisation worth the name; is the margin durable and why; does management talk to shareholders when things go badly as readily as when they go well.

Concentration, and almost never selling. He held very few names. He allowed only three reasons to sell: you made a mistake in the original analysis, the company has deteriorated against those fifteen points, or something clearly better has appeared. Price was not one of them.

The evolution is toward narrowness. He started as a general analyst and ended holding a handful of technology and industrial names for decades, refusing new clients — a career that got smaller and more concentrated on purpose.

Performance

paid offa decisiona losswalked awaythe lifeshaded columns are the crashes — hover any mark

There is no public record, and this page will not pretend otherwise. Fisher & Co. never published returns, the client list was private, and no audited series exists. The reputation rests on the book, on the testimony of people who knew him — Buffett among them — and on one documented holding.

That holding is Motorola, bought in 1955 after he visited the company and held until his death in 2004: about fifty years, across the entire arc from car radios to semiconductors to mobile phones. ✓ The compounding over that period was very large; the precise figure depends on assumptions about dividends and the 2004 valuation, so no number is quoted here.

✓ documented · ○ no audited return series exists for this career

Case studies

1929 — right, and wrong at the same time. As a young analyst he concluded that the market was dangerously overvalued and said so in writing. He then invested anyway, in things that looked cheap, and lost heavily. He described it afterwards as the most useful experience of his career: he had been correct about the market and it had not helped him at all, because he had bought poor businesses at prices that only looked low. The mechanism: a correct macro view is not a portfolio, and cheapness is not a margin of safety when the business is bad. ✓

1955 — Motorola. He visited, formed a view of the management and the research organisation rather than the earnings, bought, and then did nothing for half a century through several complete reinventions of what the company sold. The mechanism: if the thesis is about the quality of an organisation rather than a product cycle, the holding period is measured in decades and the sell discipline barely applies. ✓

The refusals. The un-glamorous half of the record, and impossible to quantify: he turned down clients, avoided whole industries he had not studied, and did not sell good businesses in the 1962 break or the 1973-74 collapse. A career of about seventy years containing very few decisions is the actual shape of what he did. ○

The other side of the record

A record this good is where scepticism is most worth spending, so:

Nobody can check it. No audited returns, no public fund, no client list. The reputation rests on a well-written book, a fifty-year hold, and the endorsement of more famous people. That is a much weaker evidentiary base than any other name in this library and it should be said first, not last.

Fifteen qualitative points with no thresholds is not a test. There is no way to fail it and no way to be wrong. A checklist of that kind will confirm whatever the analyst already believes, which is precisely the failure mode it appears to guard against.

The edge has been legislated away. Regulation Fair Disclosure and its equivalents exist specifically to prevent an analyst learning something material that the market does not know. The channel checks that remain are done at industrial scale by firms with satellite data and card-transaction feeds, not by an individual with a telephone.

Survivorship, in the purest form. Motorola is the story because Motorola worked. The names that did not are not in the book, and with no return series there is no way to weigh them.

"Almost never sell" is untested here. It is excellent advice about a business that stays excellent, and catastrophic about one that quietly decays — and Fisher's own framework offers no early-warning mechanism beyond the same qualitative judgement that selected the company in the first place.

Key lessons

• The decisive facts are usually not in the accounts. Whether research turns into products, how a business treats customers it has already won, whether management is straight when things go badly.
• Ask the competitors. They know exactly what a rival does better, and no incentive to soften it.
• Judge management by the bad quarter, not the good one. Candour under pressure is the only version of it worth anything.
• A holding is a decision you make repeatedly. Doing nothing for fifty years is not passivity; it is the same judgement, re-taken and re-confirmed.
• A correct view of the market is not a portfolio. 1929 taught him that, expensively.

Reading and links

• Common Stocks and Uncommon Profits — 1958. The fifteen points and the scuttlebutt method, and still the clearest statement of qualitative analysis.
• Conservative Investors Sleep Well — 1975.
• Developing an Investment Philosophy — 1980. Short, autobiographical, and where the 1929 episode is told.

Marked ✓ where documented and ○ where no verifiable record exists. Fisher published no returns; the performance section says so rather than filling the space. This is a profile of an investor, not a view on any security.

Profiles of investors, not views on any security, and not personal advice. Figures are marked ✓ where they are documented and ○ where they rest on secondary or private accounts — investing biography is heavily mythologised and the well-known numbers drift with each retelling. Capital is at risk.

Corrections and right of reply. Where a criticism is made of a named person it is stated as a specific measure over a stated period, attributed to its source, and separated from opinion. Assessments are opinion, honestly held, on facts believed accurate at the date shown. If anyone profiled here — or anyone acting for them — believes a fact is wrong, it will be corrected promptly and visibly, and a reply will be published alongside it on request.

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