Fisher has a fairly simple investment plan: buy only outstanding companies and sell only when they are no longer outstanding. Although many people try to time the market, this is the method that he has found will consistently return good results. However, finding outstanding companies is a bit of a challenge and the book mostly concentrates on suggestions on how to find the good ones and avoid the bad.

Fisher discovered that his main method of discovering quality companies was through “scuttlebutt”. Detailed analysis of company financials simply cannot provide the necessary information; one must talk to people who know the company. These, of course, are quite varied individuals, from competitors to vendors and customers, and when used with caution, former employees.

After scuttlebutt clearly points to a promising company, then an evaluation can be made with a list of requirements. The requirements did not seem much different that Graham and Dodd propounded in The Intelligent Investor, and certainly not nearly as elegantly as in Good to Great. They are designed to answer the questions “is management good” and “is the company doing what it needs to in order to maintain and expand its market position”. The latter focuses largely on technology research, an area that Fischer feels is required for continued success.

The book concludes some advice to investors on what not to do, which can be fairly effectively summarized by saying “ignore what Wall Street thinks is important”.

While no means a thorough treatment of investment, Fisher provides very practial guidelines to how the investor can realize consistently good profits. Unfortunately, as a fund manager Fisher is able to talk to management of a company, a luxury not necessarily afforded to the individual investor and some of his points require this ability. However, there is no way to be sure one’s judgement is correct; his guidelines merely significantly increase the probabilities, and if the individual investor must settle for slightly worse probabilities, following Fisher’s methods should still produce significantly better than average results.
Review: 8
The content, while good, is not great. The advice is sound and somewhat rare to find, but not terribly unique. I suspect that, had Good to Great been written before Fischer’s book, he would have been able to simplify his guidelines. Also, the writing, while good with good examples, is not great. This is a good book to read for information, but not for new ideas or excellence in writing.