Philip Fisher / The Growth Stock Pioneer Who Bought and Almost Never Sold
While investors of his era hunted for cheap stocks in financial statements, Fisher talked to a company’s customers, competitors and suppliers to find businesses that could grow for decades, then held them as long as possible. His 1958 book became a text Buffett praises. On this page you can check a company with the 15-point list, go out and gather information Scuttlebutt-style, and see what selling too early costs.
Illustration: a radio we designed, not a real product. No openly licensed photo of Fisher was found
Fisher started working in the market just over a year before the 1929 crash and founded his own firm during the Depression. He chose a different path from most investors of the era, looking for companies that could keep growing for a long time instead of stocks priced below their assets
He managed money for a small group of clients in San Francisco for almost 70 years. Tap each stage to follow the journey
1907 · Born on 8 September 1907 in San Francisco, California, to Arthur Fisher and Eugenia Fisher
Topics summarised and paraphrased by us, not the real table of contents
His most quoted principleIf you bought the right stock in the first place, the time to sell it is almost never
Paraphrased from Common Stocks and Uncommon Profits, not a direct quote
In Common Stocks and Uncommon Profits, Fisher gives 15 questions for checking whether a company is outstanding enough to hold long term. He writes that a company failing just a few points may still be a good investment, but if management isn’t honest, it shouldn’t be bought however good the other points are. Choose a hypothetical company, or tap each point to switch between Pass · Fail · Unknown
Do the products or services have a market big enough for sales to grow a lot for at least several more years?
Is management determined to develop new products when current ones start to grow more slowly?
Does research and development pay off relative to the company’s size?
Does the company have a sales and marketing team better than average?
Are profit margins at a worthwhile level?
Is the company doing anything to maintain or improve its profit margins?
Are its relations with employees outstanding?
Are relations within the management team good?
Is there a next generation of managers ready to step up?
Does the company analyse costs and keep good accounting controls?
Are there industry-specific features that show the company is ahead of competitors?
Will the company accept lower short-term profits for long-term profits?
Can its near-term growth happen without raising so much capital that existing shareholders are heavily diluted?
Does management disclose as much when there are problems as when things are good, or go quiet when there are problems?
Is management’s integrity beyond question?
The 15 questions are briefly paraphrased from the book, not the original wording. The scoring in this lab is ours, set up for learning. Fisher gave no fixed scoring formula. All companies are hypothetical
Traders can have a pre-entry checklist too: which way the big trend is going, whether major news is close, where the stop loss is. If the most important point fails, such as not knowing where you’ll exit, don’t enter however good the other points are
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Fisher called gathering information from people around a company Scuttlebutt. He talked to customers, competitors, suppliers, former employees and experts, because each sees the company from an angle the financial statements don’t show, and he advised meeting management only after gathering a well-rounded picture. You have time to interview 4 of 6 people, then decide whether to buy
Choose who to talk to. Tap a card to hear what they say
The companies, interview information and outcomes are all hypothetical, written following the method Fisher describes in his book. In real life, beware of non-public inside information, which is illegal to trade on
Rumours in a chat group aren’t Scuttlebutt. What Fisher did was compare several sources that see the company from different angles. Traders can do the same, for example checking whether inflation, employment and central bank tone point the same way or conflict before believing any single analysis
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Fisher saw many investors sell good stocks because the price had already risen a lot, then miss decades of growth that followed. But he didn’t say to hold everything forever. Compare 4 approaches for a hypothetical company over 40 years: hold forever, sell at a profit target, sell when growth stops, and buy the whole market
Hypothetical company model: price = earnings per share × P/E, starting at a P/E of 25. When growth stops, earnings grow just 3% a year and the P/E falls to 12 within 3 years. No dividends. Money from selling moves into the whole market, returning 8% a year. The sell-when-growth-stops approach notices 1 year late. The lines show value before tax, while the figures at the end of the lines and in the boxes are multiples of the original money after paying tax on selling everything in year 40. Fees excluded, and in reality nobody knows in advance how long a company will keep growing
Many traders close winning trades early but let losing trades run, the opposite of what Fisher taught. Define what signals that the reason behind a trend has changed, and hold until you see that signal, instead of closing because profit hit a round number
Fisher accepted just 3 reasons to sell: discovering you bought wrongly in the first place, the company no longer meeting the original criteria, and finding a clearly better opportunity. A big price rise or fear that the market will fall aren’t on the list. In each situation, choose what to do
A rising price isn’t a reason to sell in Fisher’s thinking. If the company still meets the original criteria, selling to take profit may mean missing decades of growth
The first reason Fisher accepted for selling is discovering you misjudged the company when buying, and management integrity is a criterion he never relaxed
Fisher thought selling out of fear of a market fall, hoping to buy back lower, usually loses more than it gains. He didn’t count fear of the market as a reason to sell
This is the second reason: the company no longer meets the criteria that made you buy in the first place. The growth you saw won’t repeat
The third reason is a clearly better opportunity, but Fisher warned to be truly sure before switching, because changing often adds mistakes and taxes
Fisher thought a period when a good company has a temporary problem, such as start-up costs for a new plant, may even be a time to buy more, not a reason to sell
Tap an answer on each card
We wrote these situations for learning, based on the 3 reasons to sell in Common Stocks and Uncommon Profits. The explanations are paraphrased, not Fisher’s own words
Fisher rarely appeared in the media and managed money for private clients, so his story has been retold until some parts are inaccurate. We sort each one by the weight of the evidence
Wikipedia and a Motley Fool article agree he bought in 1955 and never sold, but some websites give a different purchase year. Late in life, his son says, he was ill and couldn’t make investment decisions as well as before
The line is widely quoted, including on Wikipedia, and usually said to come from Forbes in 1969. Buffett has also praised Fisher’s book on many occasions. The split is a figure of speech, not a measurable number
Common Stocks and Uncommon Profits describes gathering information from customers, competitors, suppliers, former employees and experts before meeting management, and the term has been tied to his name ever since
He wrote that if you bought the right stock, the time to sell is almost never, but he also gave 3 reasons to sell: buying wrongly in the first place, the company no longer meeting the criteria, and finding a clearly better opportunity
A summary of his ideas in The Motley Fool says holding over 20 is a sign you don’t understand what you hold, and 10–12 is usually better. Ken Fisher says that in 1973, 6 stocks made up about 2/3 of his assets, but some sources say he held about 30, so the number varies with the period
Ken Fisher says his father taught a graduate investing course temporarily for about 2 years while the regular professor was on leave. He wasn’t a permanent professor, and he never finished his own graduate degree there
He warned against waiting for a slightly lower price and missing a great stock, but he also wrote about timing purchases, such as buying when a good company has a temporary problem, and warned that buying what the crowd loves is risky
He managed money for private clients through Fisher & Co., not a mutual fund that must disclose performance. We found no verifiable career return figure. Figures seen online are usually estimates
Ken Fisher founded his own firm, Fisher Investments, in 1979, while his father’s Fisher & Co. operated until his father retired in 1999. The two firms are separate
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Fisher didn’t just believe what management said; he compared it with customers, competitors and suppliers. Traders can use the same principle: news or analysis from one source isn’t enough, so check real economic data too
Selling because the profit is already big is what Fisher said makes investors miss large returns. For traders, instead of closing early out of fear of losing profit, try trailing your stop loss behind the price
Fisher’s reasons to sell are about the company, not the price. Traders should write down their reason for entering first, and exit when that reason no longer holds, for example when a central bank changes its tone
Fisher liked holding a few stocks he truly knew. Traders who open many currency pairs at once often carry overlapping risk without realising. Choose a few markets you understand and control the order size of each
Question 1 / 5
Founded during the Depression, and run until he retired in 1999
Then meeting management once you have a well-rounded picture
When he bought it, Motorola was still a radio maker
A rising price alone isn’t a reason to sell in his thinking
Published in 1958 and still in print today
What you can apply from Fisher is gathering information from several sources, holding what’s going the right way for a long time, and exiting when the reason changes, not when the price excites or scares you. Here are tools on 1TRADER that can help
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An American investor (1907–2004) who founded Fisher & Co. in San Francisco in 1931 and wrote Common Stocks and Uncommon Profits in 1958. He is considered a pioneer of growth stock investing
A way of researching a company through the people around it, such as customers, competitors, suppliers, former employees and industry experts, to see what financial statements don’t show, before meeting management
15 questions for checking whether a company is outstanding enough to hold long term, covering the market, new products, research, the sales team, profit margins, people, accounting systems, long-term outlook, capital raising and management integrity
He gave 3 reasons: when he found he had bought wrongly in the first place, when the company no longer met the original criteria, and when he found a clearly better opportunity. A big price rise isn’t a reason to sell
Check information from several sources before believing it, let trades going the right way run by trailing the stop loss, exit when the reason for entering changes, and focus on a few markets you truly understand
Educational content, not investment advice. The labs use models and hypothetical companies. The 15-point list is a brief paraphrase. · risk disclosure · Forex glossary
