Philip A. Fisher - Philip A. Fisher Collected Works, Foreword by Ken Fisher

Contents

Publishers Note

Although Philip Fisher is regarded as one of the greatest investors of all time, its probably safe to say he doesnt receive the acclaim of some of his contemporaries. We hope the publication of all of Fishers major published works in one digital edition will help to enhance his legacy and provide valuable and time-tested wisdom to todays investors.

History repeats itself, just not in exactly the same way. Fisher advocated buying a small number of outstanding companies with terrific growth prospects. He was an early investor in Motorola and Texas Instruments and held onto those investments for yearsto the great benefit of his clients. The question facing investors today is: What are the new Motorolas and Texas Instruments? What are the great growth stocks that will provide outsized returns for the next 10 or 20 years?

We hope the publication of Fishers collected works will help investors to answer those questions. The four publications included here provide Fishers complete methodology for identifying great investments and, just as important, demonstrate how Fisher applied his methods in the face of economic uncertainty. His work and perspective are as relevant today as they were when first written.

Foreword

My Three Bits on My Father and His Writings

This is, finally, the complete collection of all the public writings of Philip A. Fisher in one place. As such, this has never existed before. So, what else is there new to say? When the Wiley folks asked me to write this 2012 foreword to my fathers collected writings it seemed unnecessary. After all, Ive written lots about him and his writings: The 2002 introduction to Common Stocks and Uncommon Profits basically gave you his biography, who he was, and what he was like. Then came the 2003 preface to his other writings that added Developing an Investment Philosophy and portions of Conservative Investors Sleep Well . And finally came my 2007 foreword to the re-introduction of Paths to Wealth through Common Stocks . All are included herein and need no alternation. I wrote everything I could think of.

So, again, what else is there to say? I wracked my brain after re-reading both his works and writings about themand pondering him. Turns out there is a bit morein three blocks: 1) a bit more about him, 2) a bit about Chapters 714 of Conservative Investors Sleep Well which are published here for the first time in 37 years, and 3) a bit of how I, as the person who knew him best in the world business-wise, would envision how he might look at todays world were he now in his prime.

A Bit More About Phil Fisher

I remember it very well, like a lightning bolt hitting me. Just after he had died a dastardly death from dementia, on March 11, 2004, I was sitting on my back deck on a warm spring afternoon. Yet I didnt write about my insight in my 2007 forewordI guess because that was about the book Paths to Wealth and wasnt really about him. But what was my insight?

Various far-flung family members had congregated at my home, as commonly happens in any family when someone dies. Warm, clear weatherbeautiful views of the Pacific. Eating, drinking, chatting, remembering; a few tears and lots of laughs. Normal phenomena for the phenomena! My mother, ravaged by her own advanced dementia (she didnt pass on until 2010), was for the first time bedridden at her home (where she and my father had lived and I had been raised), having just suffered a fall and hip breakbroken hips are unfortunately common among the aged and that is what had also happened to my father in 1998, launching his long trajectory toward death.

My eldest niece, Caroline, named after my fathers sister (who was herself named after the matriarch of fathers extended family, his aunt, Caroline Fishercovered in my 2002 introduction to Common Stocks and Uncommon Profits ), was there. I hadnt seen Cary in a few years. She was 36 then and a busy high-end pediatric psychiatrist based in Boston who rarely got back to the west coast and hadnt really wanted to see my parents in their demented decline for fear it would blur earlier, happy memories. Id been bantering with various other family members about fathers behavioral oddities and she blurted it out: The only thing you really have to know about grandpa is that he was a classic textbook Aspergers case. My response was, Whats Aspergers? And she profiled it for me. And it sounded a lot like him.

Then I remembered. Id heard that name Aspergers before but never much paid attention. And I remembered some doctor had written me after reading my 2002 introduction describing my father. The doctor thought fathers behavior sounded like Aspergers Syndrome. But I had paid no attention. It was just some diagnosis from some guy far away I didnt know who didnt know father directlyprobably some crackpot. But Cary was and is a serious psychiatrist and had known him very well and I wasnt going to discount her pronouncement. She was and is fully capable of diagnosis. That night I read at length online about Aspergers. I cried a lot that night and in some ways knew my father for the very first time. It explained so much I otherwise hadnt been able to. Its him to a tee. It was for me the missing link in making him explicable.

If you want to know who Phil Fisher was, first read about Aspergers Syndrome on Wikipedia. Then read my 2002 introduction to Common Stocks and Uncommon Profits , and all his oddities tie together and make perfect sense. If you come to understand this syndrome and my description of him you will know him pretty darned well.

A Bit About Chapters 714 of Conservative Investors Sleep Well

This reintroduces those February 1975 chapters of Conservative Investors Sleep Well which were excluded in the 2003 version of Common Stocks and Uncommon Profits and Other Writings . Why were they excluded then? First, Wiley didnt want the 290 page book another 117 pages longer. Second, the excluded chapters were believed to be too focused on the 1970s and maybe redundant with parts of Common Stocks . I disagree. My father was fundamental in investing in all ways and also almost never wrote the same thing twice the same way. And I know that to be true with these chapters because I helped him with them.

Take Chapter 7 on dividends. He had covered dividends beforein fact, in Chapter 7 of Common Stocks and Uncommon Profits . In both discussions of dividends, fatheras alwaysthought in terms of total return and regularly discounted dividends relative to total returnwhich is quite technically correct. His main orientation was toward capital gains and the lower stocks went the more important capital gains became. But, for a fact, for years now, after every bear market, dividend-based investing becomes overtly trendy and supported by the pseudo-intelligentsia. And so it is now, in 2012. And here in Chapter 7 of Conservative Investors Sleep Well he tells youin the aftermath of another very big bear market, what was then the biggest bear market since the Great Depressionwhy focusing on dividends is, as he would say were he speaking and not writing, Nuts!

Chapters 8 and 9, while not earth-shattering, are a good recount of the history of what caused investors to go wrong in the late 1960s and early 1970s. Many of the problems he covers in Chapter 8 are still very much with us today. This chapter is good reading for investors to see how myopia continues, persistently, to engulf us.

I would rephrase his definition of conservative investing as simply, knowing your stuff. If you know everything about what most folks think of as a risky situation, then it isnt really so risky. But you have to know your stuff. He always presumed most folks werent even close. He regularly presumed it was easier to know what you needed to know to invest successfully, given time and patience, than most could fathom. And as he also wrote in his preface to Common Stocks , it is easier to know what will happen than exactly when it will happen. So, in Chapter 10 of Conservative Investors Sleep Well he gives you 15 fast pages on Learning the Facts.