03 -- Philip Fisher -- The Scuttlebutt Innovator

Philip A. Fisher began his mark on the world as a Stanford dropout, but would alter become one of the most influential figures in the world of business and investing. He launched his career in 1928 as a securities analyst and later founded Fisher & Co. in 1931, managing it until his retirement in 1999. Known for his focus on innovative, research-driven companies and long-term investing, Fisher gained legendary status through his influential book, Common Stocks and Uncommon Profits. He pioneered the "scuttlebutt" technique, gathering detailed company insights to inform investment decisions. Fisher's most notable investment was in Motorola, which he held from 1955 until his death. His work significantly influenced renowned investors like Warren Buffett, who praised Fisher's methods and writings.

Fisher's Investment Philosophy -- Growth, Growth, Growth

Fisher was a pioneer in the field of growth investing. He is a firm believer in investing in companies that exhibit signs of above-average growth, even if the security appears expensive in terms of traditional quantitative metrics. It stands in great contrast to value investing, which focuses on looking out for undervalued securities. (See Graham and Buffett)

One of Fisher's most famous investment was his purchase of Motorola, a company which he purchased in 1955, and held it for almost half a century until his death in 2004. Buy-and-hold, he coined.

The Scuttlebutt Method

The scuttlebutt is an old nautical term -- a cask on a ship used for drinking water, where sailors gathered to exchange stories and information. This is synonymous to Fisher's strategy to differentiate between companies with great growth potential, as supposed to companies which are tumbling. Here, there are three key aspects:

Diverse Perspectives: Collecting insights from suppliers, customers, competitors, and former employees.

Qualitative Analysis: Focusing on understanding the company's management quality, corporate culture, and competitive positioning.

Informed Decisions: Using the gathered information to make more informed investment choices by assessing the company’s potential for long-term growth.

Common Stocks and Uncommon Profits

Growth investors and value investors often stand on differing perspectives. Buffett, a disciple of Benjamin Graham, has been a staunch value investor all these years -- while Fisher stands as a growth investor. Despite this, Buffett offered immense praise to Fisher's seminal work, his philosophies still prominent in today's ever-varying investing world:

15 Points to Look For in a Common Stock

1. Does the company have products or services with sufficient market potential to make possible a sizeable increase in sales for at least several years?

2. Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?

3. How effective are the company's research and development efforts in relation to its size?

4. Does the company have an above-average sales organization?

5. Does the company have a worthwhile profit margin?

6. What is the company doing to maintain or improve profit margins?

7. Does the company have outstanding labor and personnel relations?

8. Does the company have outstanding executive relations?

9. Does the company have depth to its management?

10. How good are the company's cost analysis and accounting controls?

11. Are there other aspects of the business, somewhat peculiar to the industry involved, which will give the investor important clues as to how outstanding the company will be in relation to its competition?

12. Does the company have a short-range or long-range outlook in regard to profits?

13. In the foreseeable future, will the growth of the company require sufficient equity financing so that the larger number of shares then outstanding will largely cancel the existing stockholders' benefit from this anticipated growth?

14. Does the management talk freely to investors about its affairs when things are going well but quot;clam upquot; when troubles or disappointments occur?

15. Does the company have a management of unquestionable integrity?

Legacy and Influence

Fisher is part of the greatest generation, having lived through the hardships of the Great Depression, witnessing the progress of the Second World War. They say tough times make great men, and Fisher was certainly an expert crafted by the circumstances which surrounded him. As financial markets evolve, the core tenets of Fisher's philosophy —emphasising quality, integrity, and long-term growth — continue to resonate, ensuring that his insights endure in the ever-changing landscape of investing.