Key points

● Fisher was the first to propose to measure the value of a company's shares in terms of its potential growth.

● Fisher believes that investors new to the stock market should centralize their portfolios and buy only one or more high-growth stocks.

● on the impact of war, Fisher believes that the stock market often falls before the war breaks out, stabilizes when the war breaks out, and soars after the war is over.

● Fisher believes that investors pursuing substantial capital growth should play down the importance of dividends.

If Graham is a value analyst who insists on "low-risk" investment, then Philip Fisher can be called the father of growth stocks chasing "high risk and high return".

As one of the pioneers of modern investment theory, Fisher first proposed to measure the stock value of a company by its potential growth ability.

Fisher believes that it can increase the analysis of the intrinsic value of the company, pay attention to the company's development prospects and management capabilities, oppose short-term trading to make profits, support long-term stock investment, and advise investors to buy stocks with growth value expectations.

Fisher also believes thatInvestors who are new to the stock market should centralize their portfolios and buy only one or more high-growth stocks.

Grapevine warfare

Fisher insists on growth investment and attaches importance to the quality of the company's management.

In order to accurately judge whether a company is growing or not, Fisher analyzes it from the perspective of the company's development prospect, profitability, management level, etc.A complete set of theoretical analysis system has been established.

In terms of development prospects:

Is the company an emerging industry and does it have market potential?

Companies in emerging industries with greater market potential tend to have higher-than-average profitability

Profitability:

Can the company effectively control costs?

Companies that can control costs often stand the test of the market and maintain profitability

Does the company have a high level of marketing ability?

No matter how good the product or service is, if it lacks the marketing ability, it may not be able to occupy the market.

In terms of company management:

Does the company's investment have a strategy dedicated to long-term development?

Does the management of the company have a high level of management ability, integrity and a strong sense of responsibility?

……

Based on the above analysis, Fisher created a tactic called "grapevine", which means to inquire about the main grapevines with the same purpose as groping for the main grapevines on a disorganized grape trellis. Through interviews with company executives, employees, customers and even competitors, track core information, eliminate invalid information, and finally find out the real situation of the company.

The principle of no investment

In his investment career of more than half a century, Fisher summed up the following ten principles of non-investment:

first,Don't buy companies that are in the start-up stage. Fisher defines an enterprise that has been established for less than three years or a stable profit of less than one year as a start-up.If a company is in the start-up stage, investors can only see the blueprint of the company, and the cost of preventing its risks and predicting its advantages is high. Compared with analyzing old companies, the chances of making misjudgments in start-ups are much higher, and there are plenty of excellent investment opportunities in old companies.

Second,Don't ignore a good stock just because it is traded in the over-the-counter market.The key to investment is to choose growth stocks and choose a good company, not where the company is listed.

Third,Don't buy shares in the company just because you like the "style" of the company's annual report.This kind of behavior is actually overly emotional, and good investors must be rational at all times.

FourthJust because the company's price-to-earnings ratio is high does not mean that future earnings growth has been reflected in the stock price.Fisher believes that truly excellent growth companies can continue to develop new sources of profits, and their industries have similar growth dynamics, and the price-to-earnings ratio of 5-10 years later will certainly be higher than that of ordinary stocks.

FifthDon't haggle over every penny.Fei Xue believes that buying growth stocks should not be too "money-saving", and there is no need to miss the investment opportunity for the sake of a slight price difference in favorite stocks. Once it is determined that the profitability of the target company is about to improve significantly, it is a buying opportunity.

SixthDon't put too much emphasis on diversification.Fisher believes that if investors put too much emphasis on diversification, they may have no time to take care of a large number of stocks held by their opponents, and the final effect will not be good.

SeventhDon't worry about the risk of buying stocks in the shadow of war.Fisher believes that there were 10 major wars in the 20th century, and statistics show that the stock market fell before the war, but began to stabilize when the war broke out and skyrocketed after the war ended. The reason is that the war led to huge government spending, thus diluting the purchasing power of money, that is, leading to inflation. Therefore, it is the most unwise to hold cash after the outbreak of war. The right thing to do is to buy carefully and gradually before the outbreak of the war, and speed up the purchase as soon as the war breaks out.It is important to note, however, that if the country loses in the war, its currency will become worthless, and investors will have the same result, whether they hold stocks or cash.

EighthDon't be affected by the stock's past data records.Fisher believes that the main factors affecting the stock price are the future rather than the past, and the changes in the company's industry, market competitiveness, the launch of new products, the change of management, and so on, should be studied by investors.

NinthWhen buying really good growth stocks, you need to consider not only the price, but also the timing.What this actually means is that when it is impossible to fully judge the trend of the market, you can choose to make a "fixed investment" at an important point in time. Fisher believes that the buying price is not based on a technically important point, that is, not at a specific price, but on a particular day, such as an important point in the development of the company. By studying the successful business plans in the company's history, we can find that a certain point in these business plans at the stage of development will be reflected in the stock price.

TenthDon't go with the tide.Fisher believes that smart investors need to think independently and dare to come up with answers that are different from those of the public when the vast majority of people are biased towards one side. The easiest way for fledgling investors to practice first is not to drift with the tide and avoid getting caught up in herding.

Eight investment philosophies

Fisher also summed up his eight investment ideas in his book on the profits of growing stocks:

first,The investment target is focused on growth companies.Such growth companies often have clear development plans to support substantial long-term profit growth, and their inherent characteristics make it difficult for new entrants to share their high growth.

Second,Focus on buying companies that are out of favor.When the market moves or the market misjudges the true value of a company at that time, the stock price is much lower than the true value, it should be bought decisively. If there are several optional investment targets, you should choose the company with the lowest share price relative to value, so that the investment risk can be minimized.

Third,Cherish the low-price buying opportunities of quality companies.Excellent companies account for only about 5% in any market, and it is an once-in-a-lifetime opportunity to find those with low share prices. Once the opportunity comes, you should buy heavily.

FourthInvestors who pursue substantial capital growth should play down the importance of dividends. In companies with high profits but low dividends or no dividends at all, they are most likely to find ideal investors. Most growing companies invest most of their profits in new business expansion. If there is a large proportion of dividends (mostly cash dividends), it is mostly because of the difficulty of the company's business expansion.

FifthInvestors should have a clear understanding that people make mistakes and define this mistake as the inherent cost of getting greater returns.However, never ignore mistakes, but analyze them as soon as possible, understand the reasons for them, and figure out how to avoid making mistakes again. The ability to withstand small losses in some stocks and expanding profits in other promising stocks is a sign of good investment management.

SixthStocks should be held firmly until the nature of the company changes fundamentally, or until the company's growth rate is no longer higher than the market.Unless there are very exceptional circumstances, it should not be sold because of forecasts of the direction of the economy or the stock market, because changes in this area are too difficult to predict. Never sell the most attractive stocks for short-term reasons.

SeventhA basic element of excellent stock investment management is not to blindly follow the mainstream opinions of the current financial circle, nor to reject the prevailing views in order to do the opposite.Investors should have more knowledge, apply better judgment, thoroughly evaluate specific situations, and have the courage to tell others your judgment, and learn to stick to it when you are right.

EighthInvesting in stocks, like most other areas of human activity, requires hard work, diligence, integrity and integrity if you want to succeed.Stock investment sometimes inevitably depends on luck, but in the long run, good luck and bad luck will offset each other. If you want to continue to succeed, you must rely on skills and apply good principles.