This is the third leg of the “Four Dimensions of Investing” series. The first two were discussed as part of Value Investing Almanac’s special reports (previous issues). It’s recommended that you read the first two parts before reading this.
Philip Fisher’s investment classic Common Stocks and Uncommon Profits ranks pretty close to Benjamin Graham’s The Intelligent Investor and for many years, it has been part of the curriculum in the investment class at the Stanford Graduate School of Business. Fisher is also known for his scuttlebutt approach. In the book’s introduction, Kenneth Fisher, Philip Fisher’s son, describes the Scuttlebutt approach thus –
Scuttlebutt means avoiding malarkey mills and seeking information from competitors, customers, and suppliers, all of whom have a vested interest in the target company, and few of whom have any reason to see the firm unrealistically. It means talking to the sales representatives of a company’s competitors, who inherently have a basis to see the target company negatively but typically don’t if the target is great. It means talking to the research people and management people of competitors as well. If all those folks see reality and strength in the target’s operations and respect it and even fear it, well, simply said, it isn’t Enron. You can count on it.
Today we’re going to look at the third dimension of conservative investing that Fisher has discussed in this lesser known book – Conservative Investors Sleep Well – about which Kenneth writes, “It is simply the best treatise I know on how to buy and hold growth stocks without taking much risk.
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