Philip Fisher's Investing Strategy
Philip Fisher's growth-quality framework from Common Stocks and Uncommon Profits (1958). Buffett described himself as '85% Graham, 15% Fisher', Fisher is the missing piece between Graham's quantitative value and Buffett's qualitative compounders. Find businesses with R&D-fuelled pricing power, durable management, and decade-long competitive runways. Hold the great ones forever.
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The framework, in plain English
- Gross margin ≥ 50%, Fisher's signature signal of genuine pricing power.
- Revenue CAGR ≥ 10% over 5 years: the business is growing, not just defending share.
- EPS grows faster than revenue, so operating leverage is doing its job.
- ROIC ≥ 15%, capital is being deployed at high incremental returns.
- Conservative balance sheet, net debt / EBITDA ≤ 2× and limited share-count dilution.
- Willing to pay P/E up to 35 for exceptional quality, Fisher famously refused to sell good businesses to chase cheap ones.
From Common Stocks and Uncommon Profits (Fisher, 1958) and Conservative Investors Sleep Well (Fisher, 1975).
Top 10 stocks scoring high on Philip Fisher
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