Buying into Dow, Texas Instruments and Motorola cheaply – Philip Fisher demonstrates the value of detailed analysis
Reflecting on his ideas to further hone his investment philosophy Philip Fisher, in the 1940s, decided to concentrate on finding unusual companies which had the possibility of significant growth and earnings and to restrict his client group to a few large investors (12 was the maximum number of clients Fisher had during the 1950s and 60s).
He also decided that the chemical industry would enjoy substantial expansion after the war, and set about finding the most attractive large chemical company. Researching the chemical industry to find out everything he could about the companies and their managements, he talked to anyone who had some knowledge of the industry.
All the qualitative pieces of information (e.g. innovations, inventions and competitive conditions) that he had gathered were added to his analysis of financial data. We are talking about months of work here, not the few minutes some share punters allocate.
By spring 1947 he had managed to single out one firm which met all his criteria – this was Dow Chemical Company. The reasons for his choice are:
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