Discover Philip Fisher’s ultimate secret to successful investing in 15 points! His revolutionary philosophy revealed!
An influential investment approach
Philip Fisher is considered one of the most influential investors of the 20th century. By founding Fisher & Co in 1931, he not only built a reputation for excellence in money management, but he also enriched his clients through his talent for investing wisely. Among his successful investments is Texas Instruments, a testament to his ability to identify long-term growth opportunities in promising companies.
Fisher’s concept of informed investing
Fisher’s investment strategy is based on the acquisition and retention of exceptional, high-growth companies. This strategy seems obvious, but it requires careful attention to understand the intricacies of its philosophy. According to Fisher, it is essential to look for brilliantly run companies, with leaders committed to achieving continued growth.
Dividends are not always the best option
Contrary to popular belief, Fisher did not believe that high dividends guaranteed investment security. He argued that companies paying high dividends often sacrificed the ability to reinvest in growth, which could harm the stock price in the long term. According to him, it was preferable to focus on internal expansion of the company.
Fisher’s 15 selective criteria
Sales growth potential
It is essential to target businesses that show continued or potential increase in sales.
Continuous innovation
Leaders must encourage product innovation, which is essential to ensure sustained revenue growth.
R&D efficiency
It is important to ensure that research and development results in cost-effective products that meet consumer needs.
Sales organization excellence
An effective marketing strategy is essential to ensure the sustainability of the company.
Robust profit margin
Business growth must be accompanied by profits. It is therefore essential to carefully analyze the gross margin.
Maintenance and improvement of margins
Foresighted management must result in a constant search for profit improvement.
Harmonious employer-employee relations
Valued and loyal employees contribute to the growth of a dynamic company.
Strong professional relationships with senior management
An atmosphere of internal progression and strong leadership are positive signs.
Management team with diverse skills
Excessive dependence on a key individual can weaken the business. It is better to have broad leadership.
Accounting rigor and budgetary control
Strong financial control is vital to effectively manage business growth.
Sector benefits
It is important to identify the company’s specific assets, such as patents or know-how, that differentiate it from its competitors.
Long-term view of profitability
Companies that prioritize long-term growth are more likely to persist over time.
Need for short-term financing
Sufficient liquidity or good borrowing capacity is crucial to avoid stock dilution.
Managerial transparency
Frank communication from management with investors, regardless of the circumstances, is essential.
Management integrity
Management’s honesty with shareholders is a determining criterion for long-term success.
The “gossip” method
To understand a business as a whole, it is often necessary to think outside the box. Fisher recommended gathering diverse testimony, whether from the company itself, its competitors, or other industry experts. This makes it possible to establish a precise analysis based on the 15 criteria mentioned above.
It is important to note that this analysis is not a substitute for advice from an investment professional. It is simply intended to inform the decisions of those engaged in in-depth evaluation of companies for their investments, taking into account the volatility of financial markets.