Philip A. Fisher, 1907-2004

Portfolio Strategy
Philip A. Fisher, 1907-2004
Kenneth L. Fisher, 04.26.04, 12:00 AM ET

In your bones believe in capitalism and its basic ability, despite recessions and scandals, to better the human condition.

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Phillip A. Fisher died Mar. 11 at 96 from old age. He was a great man. Not in his last years, ravaged by dementia. Then he was just a little old man. But he was my little old man. I will love him, forever! Among the pioneer, formative thinkers in the growth stock school of investing, he may have been the last professional witnessing the 1929 crash to go on to become a big name.

His career spanned 74 years--but was more diverse than growth stock picking. He did early venture capital and private equity, advised chief executives, wrote and taught. He had an impact. For decades, big names in investing claimed Dad as a mentor, role model, inspiration or whatever.

His first book, Common Stocks and Uncommon Profits, appeared in 1958. It was the first investment book ever to make the New York Times bestseller list. It's still in print at Wiley.

Phil Fisher was one of only three people ever to teach the investment course at Stanford's Graduate School of Business. He taught Jack McDonald, the course's current professor. For 40 years Jack has seen to it that you can't get past that class without reading Phil Fisher. Dad last lectured at Stanford for Jack four years ago. He had a knack for getting great minds to think their own thoughts--but bigger than they would have conceived otherwise on their own. Many disciples described this experience to me.

People presume I learned lots about stocks from him. Not really! He got me started and then I fashioned my own notions, as did everyone else he influenced. Much more important in making me who I am were his early 1950s bedtime stories. He conceived stunning adventure tales of pirates, explorers, kings and crooks. The fictional hero was Jerry Clerenden. I couldn't fathom this at the time but I realized later that this character was created as the person Dad wanted me to be. His stories drove me to dream bigger visions than most children are allowed.

He was small, slight, almost gaunt, timid, forever fretful. But great minds drew insights out of him like water from a well.

His views are in his writings and those of others. I won't repeat. What remains unsaid? What would he think now if he were alive and in his right mind?

First, always think long term. A short-term horizon, if it is relevant at all, is a mere tactical tool to get to your long-term future. Thinking long term usually goes hand in hand with a low turnover of a portfolio. My father bought Motorola in 1955, when its main attraction was radio systems. He still owned it at his death.

Next, every single month read Phil Fisher's favorite poem, Rudyard Kipling's oft-quoted "If," to help you become Jerry Clerenden.

In your bones believe in capitalism and its basic ability, despite recessions and scandals, to better the human condition. From that belief you can conclude that, over the long term, the stock market works. It is better to come to this conclusion from faith than from studying a column of statistics.

Buy what you understand. You can hear Peter Lynch in that. And not too many stocks. You hear Warren Buffett in that. In his primeDad owned about 30 stocks. And diversify into different types, and not only your favorite types, so you have ones that work when your favorites fail.

Don't try to be Phil Fisher. Or Warren Buffett or Peter Lynch or anyone else. Be yourself, but be more energetic and imaginative than you thought you could be. Dream bigger.

I remember what my father said eight years ago to James W. Michaels, then the editor of this magazine: "What are you doing your competitors aren't doing yet?" At the time Jim Michaels had been in the job for 35 years, but he was no less imaginative than he had been at the start.

Try posing that question about some cherished company in your portfolio. What is the management doing that the competition is not doing? Great managements live the answer and in the process create great stocks.

Ignore the long-term doomsters. The future is just beginning and will be awesome. My father would say technology offers society a bounty in the decades ahead that is vastly underestimated even by technologists. Still, it is as powerful to invest in companies adopting technology as those creating it. With either, he would urge buying stocks of firms he called "fundamental." You don't buy assets or earnings but the overall endeavor. I'll have stocks for you next month.



Kenneth L. Fisher is a Woodside, Calif.-based money manager. Visit his homepage at www.forbes.com/fisher.

http://www.forbes.com/free_forbes/2004/0426/142.html