15 points for successful investing: Philip Fisher’s revolutionary philosophy finally revealed!

Philip Fisher’s investment method

Philip Fisher is one of the most influential investors of the 20th century. By establishing Fisher & Co in 1931, he not only built his reputation on excellence in fund management, but he also enriched his clients with his talent for wise investments. One of his most notable achievements is investing in Texas Instruments, demonstrating his ability to seize long-term growth opportunities in promising companies.

Fisher’s concept of informed investing

Fisher’s approach is based on acquiring and retaining exceptional, high-growth businesses. This requires careful attention to understand its philosophy. According to him, it is essential to identify brilliantly run companies, with leaders committed to continued growth and capable of realizing this ambition.

Dividends are not always synonymous with security

Contrary to popular belief, Fisher did not consider that high dividends were systematically synonymous with safety. According to him, companies that distribute high dividends often sacrifice the possibility of reinvesting in growth, which can compromise the evolution of the share price in the long term. He therefore recommended favoring the internal expansion of the company.

Fisher’s 15 selective criteria

Sales growth potential

It is essential to target businesses that show continued or potential increase in sales.

Continuous innovation

Leaders must promote product innovation, thereby ensuring sustained revenue growth.

R&D efficiency

It is important to ensure that research and development results in profitable products that meet consumer needs.

Sales organization excellence

An effective marketing strategy is essential to ensure the sustainability of the company.

Robust profit margin

Growth must be accompanied by profits, hence the importance of careful gross margin analysis.

Maintenance and improvement of margins

Foresighted management must reflect a constant search for profit improvement.

Harmonious employer-employee relations

Valued and loyal employees contribute to the growth of a dynamic company.

Strong professional relationships with senior management

An atmosphere of internal progression and strong leadership are encouraging signs.

Management team with diverse skills

Too much dependence on a key individual can weaken the company; broader steering is preferable.

Accounting rigor and budgetary control

Strong financial control is essential to effectively manage business growth.

Sector benefits

It is important to identify the company’s specific assets, such as patents or know-how, that differentiate it from other players in the sector.

Long-term view of profitability

Companies that prioritize long-term growth tend to be more sustainable.

Need for short-term financing

Availability of sufficient liquidity or borrowing capacity is crucial to avoid stock dilution.

Managerial transparency

Frank communication from management with investors is essential, regardless of the circumstances.

Management integrity

Management’s honesty with shareholders is a determining criterion for long-term success.

The “gossip” method

To understand a business as a whole, it is often necessary to think outside the box. Fisher recommended gathering a variety of information, whether from the company itself, its competitors, or other industry experts. This makes it possible to establish a precise analysis based on the 15 criteria mentioned previously.

While this analysis is relevant, it is important to emphasize that it is not a substitute for advice from an investment professional. It simply serves to inform the decisions of investors prepared to engage in in-depth evaluation of companies, taking into account the volatility inherent in financial markets.