Fisher is a growth stock adherent, and some have said that he is the Father of Growth Investing. Many contrast him to Benjamin Graham, whom more than a few have dubbed the Father of Value Investing. Fisher's book, Common Stocks and Uncommon Profits, provides an uneasy cornerstone for growth stock and technology stock investing. However, at some point, growth stock investing became synonymous with technology stock investing. As such, on one extreme, we have Fisher and growth (tech) stocks, and on the other we have Graham(and Dodd) and boring but predictable concerns with a margin of safety, and adherents to either extreme bicker back and forth as to which method for selecting common stocks for investment is better.
'Growth', I believe, is all fine and good, so long as you can find outfits that can hold their value, and continue to build value. Moreover, like its sister 'Growth', 'Opportunity' too is a wonderful thing, so long as 'Growth' and 'Opportunity' can be turned into profits and (dividend) checks in the mail.
Unlike Graham's sage advice, with which I agree 100 percent, I don't necessarily agree with Fisher's stance on many investment issues, but I do concede that the reasoning behind them does have merit. Take his position on dividends, for example. A company with excess cash and no reasonable opportunities for investment well within its circle of competence should send that cash to its shareholders, so long as it maintains a satisfactory reserve fund, can meet its financing needs, and has all of its investment needs met. Long experience has shown that companies that sit on top of a large (and growing) cash pile inevitably succumb to the temptation to squander it somehow or another (usually on vanity purchases), always to the detriment of its core business. Thus, companies that are generating cash in excess of their immediate and foreseeable needs (beyond a built-in cushion) should pay a dividend, and increase that dividend as earnings increase. Firms that don't do this, I believe, simply do not make for wise investments.
Furthermore, many have legitimately questioned the applicability of one technique underlying Fisher's investment method- the use of scuttlebutt. Most concerns have centered around how to go about doing it, which to me raises certain warning flags, and not on more important facets such as its usefulness (with regard to the kind of information gleaned) in practice and its potential (negative) consequences. One must exercise extreme caution when using scuttlebutt, for the following reasons. First, people, from individual investors to managers at publicly listed companies, especially the smaller tech outfits, know about this book, and so they also know how to use the book's information in order to present themselves so as to attract your investment dollars. Second, reliance on scuttlebutt depends to a great extent on how it comes your way (and Fisher partially acknowledges this, but limits his discussion to 'disgruntled' former employees of a company under consideration), and you have to exercise caution here, for you may find yourself in big trouble with the Federal Boys, or worse- with legal vultures circling over your head, should you act on it. Third, companies have a distinct disliking to scuttlebutt, as it may serve as one source of leaks of trade secrets or other sensitive information. Fourth, related to the third point, companies may intentionally use 'scuttlebutt' to 'plant' dis-information or even mis-information before small-time investors, specifically, and institutional investors, always. Finally, for those intrepid souls wondering how to put scuttlebutt to work, as an aside, for anyone who has attended college or some trade school, getting the inside story may be as easy as contacting the alumni office of your alma mater, or even as simple as hitting up a former frat, sorority or other college club member. More simply, one can directly contact folks involved in industry trade organizations as well.
In my mind, Mr. Fisher's method works best when one applies it to large and established concerns. When I ponder the investment problem, I come to the conclusion that your most reasonable assessment of a company must rest on an analysis of the company's past behavior, coupled with a current snapshot of the company in the context of its industry, and not on scuttlebutt. But then, Ben Graham said pretty much the same thing over and over again in his book Security Analysis.
Overall, I liked Fisher's Fifteen Points, but I liked the little mini-book, "Conservative Investors Sleep Well", which forms Part Two of the book, even better. You could obtain the same information by reading a denser book like Competitive Strategy, by Michael Porter, but getting the same information, in condensed form, from a seasoned and successful practitioner like Mr. Fisher imparts a level credibility, reliability and trust that all other sources lack. I also like Fisher's emphasis on understanding the business (and visiting the company if necessary to get detailed information, wherever possible, necessary and appropriate), a point that Graham, although he did not overlook it, did not specifically emphasize.
One must understand Fisher in order to know what to expect if all goes well with investment operations. In contrast, one must understand Graham in order to know what to expect if everything goes to hell in a handbasket. One can not successfully invest with only one or the other, as doing so will lead to mediocre results at best, and poor results more typically. One needs to know both.
Although I will not put the concept of scuttlebutt to practice, as it strikes me as being both dangerous and speculative, I will put the rest of the information to work. In sum, I will definitely keep the book, and it will sit next to my copies of Benjamin Graham's The Intelligent Investor and Security Analysis, where it will remain as one of my must-have and must-consult investment references.