Oct 18 • Leadership & Have Connections
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Genius’s have all learned from other geniuses.
Benjamin Graham taught a young Warren Buffett (value investing)
Then
Once Buffett became a millionaire in his 50’s
Phil Fisher taught Warren Buffett
It’s like when
Filmore Slim taught a young Jimi Starr (how to think fast and knock ___)
Then
Mel Salisbury (taught him the pick pocket game)
On his way to Las Vegas
Then
Chuck White (who taught Mel Salisbury, also taught Jimi Starr in NYC)
Philip Fisher taught Warren Buffett the importance of assessing qualitative factors like management quality, competitive advantages, and growth potential when choosing investments
. This complemented the quantitative-focused "value investing" approach Buffett learned from his mentor, Benjamin Graham, which centered on finding undervalued stocks based on financial statements alone.
Key lessons from Philip Fisher
- The "Scuttlebutt" Method: Fisher advocated for extensive research by gathering insights from competitors, customers, suppliers, and former employees to gain a holistic view of a company's strengths and weaknesses.
- Invest in great businesses at fair prices: Fisher's philosophy helped Buffett evolve his thinking from buying "cigar butt" companies (deeply undervalued but mediocre businesses) to focusing on high-quality companies with strong growth prospects, even if they were not extremely cheap.
- Emphasize long-term potential: Both Fisher and Buffett prioritize businesses with durable competitive advantages, which Fisher called "freedom from 'cutthroat competition'". This is relevant to modern sectors like tech, where innovation is key.
- Hold for the long term: Fisher taught that if the initial research is done correctly, the best time to sell a stock is "almost never," a principle Buffett adopted.
- Concentrate on high-quality companies: Fisher advocated for a concentrated portfolio of a few outstanding businesses rather than holding a large, mediocre collection.
Buffett credits both influences, famously saying that he is "85% Benjamin Graham and 15% Philip Fisher" in his investing style, though the "Fisher" aspect became increasingly evident in his later-stage investments in businesses like See's Candies and Apple.
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