Investment Nuggets
You could call Philip Fisher as the stock market's first `tech investor'. His seminal contribution to the field of growth investing is his book Common Stocks and Uncommon Profits, originally published in 1958, which broke new ground in explaining to a whole new generation of investors on how they could go about evaluating and selecting fast-growing, innovative companies. Fisher used his techniques to pinpoint the likes of Motorola and Texas Instruments in the mid-1950s, two stocks that registered substantial gains over the following decades.
When compared to many other stock market greats, Fisher's philosophy is notable for its near-total focus on qualitative matters. An ardent advocate of the long-term buy and hold, Fisher spent little time worrying about traditional valuation measures and in-depth number crunching.
"Finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colourful practice of trying to buy them cheap and sell them dear".
"I became impressed both with the people (at Motorola) and with Motorola's position in the mobile communications business, where an enormous potential seemed to lie; whereas the financial community was valuing it as just another television and radio producer."
"The business grapevine is a remarkable thing. It is amazing what an accurate picture of the relative points of strength and weakness of each company in an industry can be obtained from a representative cross-section of the opinions of those who in one way or another are concerned with any particular company."
"The investor cannot pinpoint just how much per share a particular company will earn two years from now... (but) he should come pretty close to judging whether a sizeable increase in average earnings is likely to occur a few years from now. But just how much increase, or the exact year in which it will occur, usually involves guessing on enough variables to make precise predictions impossible. Under such circumstances, how can anyone say with even moderate precision just what is overpriced for an outstanding company with an unusually rapid growth rate? If the growth rate is so good that in another ten years the company might well have quadrupled, is it really of such great concern whether at the moment the stock might or might not be 35 per cent overpriced? That which really matters is not to disturb a position that is going to be worth a great deal more later."
"In the field of common stocks, a little bit of the great many can never be more than a poor substitute for a few of the outstanding... the ability to see through some majority opinions to find what facts are really there is a trait that can bring rich rewards," ("The investor should ignore the scare psychology of the moment and definitely begin buying").
Additional Readings:
- IPOs Sifting through the sand - FE Investor looks at the IPO market and its pitfalls
- FMCG: Moving fast - FMCG firms should not have a problem selling; how much money they will make remains to be seen.
- Q2FY07 Review: Yet another encore! - India Inc has proved its mettle once again with a robust September quarter performance.
- FIIs may set the market direction - Focus to continue on mid-cap space
Midcaps: The bulging middle - They’re going big and are being tracked with great interest. Read on to find out how the mid-sized and small companies are thriving, irrespective of market cycles.Waiting in the wings 
- The growth potential of mid-sized firms is higher than large companies. The real challenge lies in identifying mid caps which can become tomorrow’s large caps.Present tense - Q2 ‘07 results are out, and news flow will be weak for some time. If operators want a correction, this could be the time.
Additional Reports:
- Electrotherm India - Niche Brokerage
Off-Topic Readings:
- A Formula for Long-Term Happiness What’s the difference between Warren Buffett and the average investor (give or take a few billion)? It may be as simple as knowing your limitations and investing for the long term.
Parting Thought:
- Draw a circle around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management and limited exposure to hard times. - Warren Buffett
