Here is a subset of eight cutting edge investing principles from great Phil Fisher, to whom the legend investor Warren Buffett most admired to. These are well thought and practically succeeded investment methods. Getting good understanding of these principles shape you to an excellent investor who never make investment mistakes or loose money. Here is the golden eight for you:
• Buy companies that have disciplined plans for achieving dramatic long-range profit growth and have inherent qualities making it difficult for newcomers to share in that growth.• Buy companies when they are out of favor.• Hold a stock until either (a) there has been a fundamental change in its nature (e.g., big management changes), or (b) it has grown to a point where it no longer will be growing faster than the economy as a whole.• De-emphasize the importance of dividends.• Recognize that making some mistakes is an inherent cost of investment. Taking small profits in good investments and letting losses grow in bad ones is a sign of abominable investment judgment.• Accept the fact that only a relatively small number of companies are truly outstanding. Therefore, concentrate your funds in the most desirable opportunities. Any holding of over twenty different stocks is a sign of a financial incompetence.• Never accept blindly whatever may be the dominant current opinion in the financial community. Nor should you reject the prevailing view just for the sake of being contrary.• Understand that success greatly depends on a combination of hard work, intelligence, and honesty.
It is highly recommended to buy and read the classic guide from Philip Fisher, “Common Stocks and Uncommon Profits”. This book can be a treasure in your library. From my personal experience, once after reading this guide, It is very difficult for me to find a good company, from the listed 2500+ companies, to invest because of the missing required qualities. As an investor, you should be like that. A final finding will always win because your focus on each required qualities as per this guide but one by one. This guide will certainly increase your choose power and capacity to block losing money.
It is a true foolishness, if you follow the above points as a short term investor or speculator. No article in my blog focused to short term investor or a trader. But, totally concentrated to value investment approach thus it could be helpful for all the value investors who have long term focus and like to follow the investment approaches of Warren Buffett or Benjamin Graham.
Remember the famous word from Fisher “Sustained success requires skill and consistent application of sound principles.”