Investor Philip Fisher became popular with his bestselling book “Common Stocks and Uncommon Profits” which was launched in the year 1958. From Warren Buffet to Mark Cuban, every successful investor rave about his book. I have shared a few tips on investing that I learned from him and want you to look at if you ever desire to get into investing.
Here are a few investing tips from Phil Fisher that you shouldn’t ignore if you are planning to get into investing or already have begun your journey in it.
1. Use the scuttlebutt method
Successful investor Warren Buffet has testified that the “scuttlebutt method” has always inspired him to get out of his comfort zone and talk directly to the customer about how they feel about the products they use. Great investment opportunities do not always come knocking on your door. You have to go out and look for them. This is a very simple investing tip from Phil Fisher that we all fail to overlook sometimes.
2. Don’t blindly accept shares
Not all dividends yield you the profits that they seem to promise. Some companies grow steadily while others go out of business. Make sure you do your due diligence before accepting company shares instead of cash. Also, there has to be a reason why the company you are doing business with is willing to offer its shares to you. So, don’t get too excited with the idea of owning stocks and make sure you make accepting cash a priority.
3. Ask yourself. Will the company you are investing in survive the inevitable storm?
Do not invest in companies that are experimenting with their products or do not have sufficient market research and testing data to prove it’s legitimacy. Phil Fisher is a big advocate of taking risks but he advises to do the required investigation on the companies products and services before investing your hard earned money in it. For instance, if you look at the startup companies today, it is very easy to tell whether how serious the team is about the financial growth of their company. Invest in startups that have an in-depth understanding of what the customer wants.
4. Do not invest in companies that don’t have an R & D department.
A research and development department not only improves the existing products and services but also studies what new stuff people might need in the future. This is one of the most important investing tips from Phil Fisher as most small and medium-sized organizations lack a good R & D team. And without an R & D department, these companies are not going to produce new products and services which makes investing in them a wrong decision.
There is a reason why Phil Fisher’s books are recommended by almost all successful investors over the globe. He focuses on the fundamentals of investing. And as a newbie or an intermediate investor, you can get your basics right by reading books like “Common Stocks and Uncommon Profits”. I never knew how to read the financial statements of a company. But with time, I learned and so can you.