Phil Fisher

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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. He ran it for nearly seven decades, retiring in 1999 at age 91. Fisher 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 indefinitely.

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 purely quantitative, balance-sheet-driven methodology.

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Key Stories

"85% Graham, 15% Fisher" — Buffett famously described his own investment philosophy as approximately "85% Graham and 15% Fisher." But as Berkshire grew and pure statistical bargains became insufficient, 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-focused 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 significant edge in its market? Is R&D productive? Are profit margins expanding? These questions, which seem obvious today, were revolutionary when Fisher proposed them. Buffett applied this method to his analysis of companies like Coca-Cola, Gillette, and later Apple.

Holding Period: Forever — Fisher advocated holding outstanding companies almost indefinitely, arguing that the tax and transaction costs of trading destroyed returns. He wrote: "If the job has been correctly done when a common stock is purchased, the time to sell it is — almost never." Buffett adopted this philosophy wholesale, famously declaring his favorite holding period to be "forever."

Common Stocks and Uncommon Profits — Fisher's 1958 book introduced the concept of investing in companies with outstanding management, above-average growth prospects, and high profit margins. Buffett read it shortly after its publication and immediately recognized it as a complement to Graham's framework. The book remains required reading for serious investors.

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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. The See's Candies acquisition (1972), Coca-Cola (1988), and Apple (2016) are all Fisher-influenced investments.

Management Assessment: Fisher's framework for evaluating management — looking at integrity, long-term orientation, and capital allocation skill — became central to Buffett's acquisition criteria. Berkshire's insistence on buying businesses with outstanding management teams reflects Fisher's teaching.

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: While Buffett never adopted Fisher's scuttlebutt method as systematically as Fisher himself practiced it, the principle of going beyond the numbers to understand a business's competitive position became deeply embedded in Berkshire's investment process.

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Key Passages from Buffett's Letters

I am an eager reader of whatever Phil Fisher has to say, and I recommend him to you. His common-sense approach to investing is deeply sound and well-articulated.

— Referenced in 1969 Letter to Partners

I'm 85% Benjamin Graham and 15% Phil Fisher. Graham taught me the foundation — the margin of safety, the Mr. Market metaphor, the idea that a stock is a fractional ownership of a business. Fisher taught me the immense importance of quality — buying the best companies, understanding their competitive advantages, and holding them indefinitely.

— Various shareholder meetings and interviews

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