8 Big Ideas from a Super Investor: Philip Fisher

Note: This article formed part of the April 2015 Special Report sent to subscribers of our premium newsletter Value Investing Almanack.

If you are a Warren Buffett fan, chances are slim that you haven’t heard of Philip Fisher. He belongs to the league of those very few super investors who have shaped Buffett’s investing style.

In his 2013 letter to investors, Buffett ranked Fisher’s book next to Ben Graham’s books –

…Phil Fisher put it wonderfully 54 years ago in Chapter 7 of his Common Stocks and Uncommon Profits, a book that ranks behind only The Intelligent Investor and the 1940 edition of Security Analysis in the all-time-best list for the serious investor.

Despite being considered as a super investor, Philip Fisher was little known to general public and rarely interviewed. He is widely respected and admired in the value investing circles all over the world. He is also known for his ‘scuttlebutt’ Philip Fisherapproach, which simply means seeking information from competitors, customers, and suppliers, all of whom have a vested interest in the company.

He wasn’t among those who made decisions just by reading annual reports. He believed in getting first hand information about the company from various sources.

Now, when it comes to following an advice, it’s more sensible to first take up the recommendation about “what NOT to do” instead of “what to do”. So, in the spirit of inversion, let me explore some of the don’ts in investing recommended by Fisher through his various interviews and writings.

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Latticework of Mental Models: Winner’s Curse

Consider this thought experiment –

A friend of yours is the Chairman of the Acme Oil Company. He occasionally calls with a problem and asks your advice. This time the problem is about bidding in an auction. It seems another oil company has gone into bankruptcy and is forced to sell off some of the land it has acquired for future oil exploration. There is one plot Acme is interested. Until recently, it was expected that only three firms would bid for the plot, and Acme intended to bid $10 million. Now they have learned that seven more firms are bidding, bringing the total to ten. The question is, should Acme increase or decrease its bid? What advice would you give?

Do you advise bidding more or less?

If you’re like me and seeing this case study for the first time you’d probably go with a higher bid. After all, there are additional bidders, and if you don’t bid more you won’t get this land. Isn’t it?

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Latticework of Mental Models: Pari-mutuel System


You don’t win by predicting the future; you win by getting the odds right. You can be right about the future and still not make any money. ~ Will Bonner The way to win in stock market, according to Charlie Munger, is to work, work, work, work and hope to have a few insights. Now, […]

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An Investor’s Best Friend

In one of his most dramatic investment outlooks yet, Bill Gross wrote in May 2015 about fears of his looming death – Having turned the corner on my 70th year, like prize winning author Julian Barnes, I have a sense of an ending. Death frightens me and causes what Barnes calls great unrest, but for […]

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Latticework of Mental Models: Loser’s Game


In the hope of executing an impressive smash, I again sent the ball flying away from the table. Losing yet another game of table tennis to Navin, a good friend and a colleague in my previous job. It was probably 50th consecutive loss since I started playing TT with Navin. “It isn’t that I am […]

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Admission Open: Safal Niveshak Academy of Stock Market Failure


“We learn wisdom from failure much more than from success. We often discover what will do, by finding out what will not do; and probably he who never made a mistake never made a discovery.” ~ Samuel Smiles “Fools say that they learn by experience. I prefer to profit by others experience.” ~ Otto von […]

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Latticework of Mental Models: The Two Systems of Thinking


“What’s 2 + 2?” You can’t help but think of the answer instantly. Your mind throws the number “4” on your thought screen. It’s actually impossible to not think of the answer here, unless you haven’t learnt to count to ten. The answer is almost like a reflex. It was an instance of fast thinking. […]

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The Dangers of Persistence

A few months back, during my lecture to a class of MBA students, I asked them to finish a sentence. The sentence was – “If you play a slot machine in a casino long enough, eventually you will ………” * The class yelled out in unison “WIN!” As most people reading this know, that is […]

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