Phil Fisher
Growth Investor & Author
Influential author whose 'scuttlebutt' research method complemented Graham's quantitative framework.
Biography
Philip Arthur Fisher (1907–2004) was a pioneering growth investor and the author of Common Stocks and Uncommon Profits (1958), one of the most influential investment books ever written. While Benjamin Graham taught Buffett how to assess value, Fisher taught him how to assess quality — and the intersection of these two frameworks became the foundation of Berkshire Hathaway's investment approach.
Born in San Francisco, Fisher started his investment counsel firm, Fisher & Company, in 1931 — at the depth of the Great Depression — and ran it for nearly seven decades. He was among the earliest investors in Texas Instruments and Motorola, holding both stocks for decades and demonstrating that extraordinary returns could come from buying excellent growth companies and holding them almost indefinitely. Where Graham hunted for statistically cheap securities, Fisher hunted for outstanding businesses, and he was willing to pay up for them because he expected their growth to bail him out.
Fisher's investment method — which he called the "scuttlebutt" approach — involved extensive qualitative research: talking to customers, suppliers, competitors, and former employees to build a deep understanding of a company's competitive position and management quality. This contrasted sharply with Graham's quantitative, balance-sheet-driven methodology, and it gave Fisher a way to judge things the financial statements could not show: the caliber of management, the strength of the sales organization, the productivity of research.
Buffett's own estimation of the book is on record in the letters. In 2012 he wrote that Common Stocks and Uncommon Profits "ranks behind only The Intelligent Investor and the 1940 edition of Security Analysis in the all-time-best list for the serious investor" — third place on a shelf curated by the man who read everything.
Key Stories
"85% Graham, 15% Fisher" — Buffett has described his own investment philosophy as roughly 85% Benjamin Graham and 15% Phil Fisher. The line comes from his public remarks (notably the 1995 shareholder meeting), not from the letters, but its logic runs through everything he wrote after the 1960s. As Berkshire grew, pure statistical bargains became too small to matter, and Fisher's influence grew proportionally. Charlie Munger independently arrived at many of the same conclusions as Fisher, and together they pushed Buffett toward the quality-first approach that produced Berkshire's most spectacular investments.
The Scuttlebutt Method — Fisher's innovation was to go beyond the numbers and investigate the qualitative aspects of a business: Is management honest? Does the company have a durable edge in its market? Is R&D productive? Are margins defensible? These questions, which seem obvious today, were radical when Fisher proposed them in 1958. Buffett applied the same instinct when he studied companies like GEICO, Coca-Cola, and Gillette — businesses whose decisive facts never appeared on a balance sheet.
Holding Period: Almost Never Sell — Fisher argued that if the analytical job had been correctly done at purchase, the time to sell a truly outstanding company was "almost never," because taxes, transaction costs, and the risk of trading down in quality destroyed the compounding. That argument, made in Common Stocks and Uncommon Profits, is the direct ancestor of Buffett's favorite holding period: forever.
The Restaurant Analogy — Buffett's Favorite Fisher Idea — The single Fisher idea Buffett returned to most often in the letters is not about picking stocks at all. It is Fisher's comparison of a corporation to a restaurant: a company, like a restaurant, must pick its clientele and stay true to it. Buffett first used the analogy in the 1979 letter to explain why Berkshire would not chase short-term-oriented shareholders; he praised it again in 2012 while discussing dividend policy, and retold it once more in 2020. Across forty-one years of letters, it is the Fisher passage he cites by name — a lesson in consistency of corporate character rather than in security analysis.
Common Stocks and Uncommon Profits — Fisher's 1958 book laid out his fifteen points for judging a common stock: outstanding management, above-average long-term growth prospects, high margins, and an organization built to sustain them. Buffett read it shortly after publication and immediately recognized it as a complement to Graham's framework. His 2012 ranking of the book — behind only Graham's two classics — is the highest praise he gives any investment author other than his teacher.
Impact on Berkshire
Fisher's influence on Berkshire, amplified through Charlie Munger, was transformative.
Quality over Price: Fisher's insistence that business quality mattered more than statistical cheapness directly led to Berkshire's shift from buying mediocre businesses at wonderful prices to buying wonderful businesses at fair prices. Buffett put the migration in one sentence in the 1989 letter: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Charlie understood this early; I was a slow learner." The See's Candies acquisition (1972), Coca-Cola (1988), and Apple (2016) are all investments in that Fisher tradition.
Management Assessment: Fisher's framework for evaluating management — integrity, long-term orientation, and an honest reckoning with results — became central to Buffett's acquisition criteria. Berkshire's insistence on buying businesses with outstanding managers already in place reflects Fisher's teaching that no spreadsheet can substitute for judging people.
Long Holding Periods: Fisher's advocacy of holding excellent businesses indefinitely reinforced Buffett's natural inclination toward permanence. Berkshire's stated policy of holding subsidiaries forever and its extremely low portfolio turnover are direct applications of Fisher's philosophy.
Qualitative Research: Buffett never practiced the scuttlebutt method as systematically as Fisher did — he preferred reading to fieldwork — but the principle of going beyond reported numbers to understand a business's competitive position became deeply embedded in Berkshire's investment process.
Corporate Consistency: The restaurant analogy gave Berkshire a doctrine about its own behavior: communicate consistently, attract shareholders who share your time horizon, and never vacillate to please a transient crowd. Berkshire's refusal to split its stock for decades, its plain-spoken letters, and its disdain for earnings guidance all descend from this Fisher idea.
Key Passages from Buffett's Letters
Phil Fisher, a respected investor and author, once likened the policies of the corporation in attracting shareholders to those of a restaurant attracting potential customers. A restaurant could seek a given clientele - patrons of fast foods, elegant dining, Oriental food, etc. - and eventually obtain an appropriate group of devotees. If the job were expertly done, that clientele, pleased with the service, menu, and price level offered, would return consistently. But the restaurant could not change its character constantly and end up with a happy and stable clientele. If the business vacillated between French cuisine and take-out chicken, the result would be a revolving door of confused and dissatisfied customers.
Above all, dividend policy should always be clear, consistent and rational. A capricious policy will confuse owners and drive away would-be investors. Phil Fisher put it wonderfully 54 years ago in Chapter 7 of his Common Stocks and Uncommon Profits, a book that ranks behind only The Intelligent Investor and the 1940 edition of Security Analysis in the all-time-best list for the serious investor. Phil explained that you can successfully run a restaurant that serves hamburgers or, alternatively, one that features Chinese food. But you can’t switch capriciously between the two and retain the fans of either.
In 1958, Phil Fisher wrote a superb book on investing. In it, he analogized running a public company to managing a restaurant. If you are seeking diners, he said, you can attract a clientele and prosper featuring either hamburgers served with a Coke or a French cuisine accompanied by exotic wines. But you must not, Fisher warned, capriciously switch from one to the other: Your message to potential customers must be consistent with what they will find upon entering your premises.