This week on our Masters in Business radio podcast, we sit down for the second time with Ken Fisher of Fisher Investments, which manages about $80 billion in client assets.
The last time we had Fisher on as a guest, as I was walking him to his next appointment, he started discussing how he built his business. Despite having just had a 90 minute conversation, we continued speaking for another 45 minutes. As I listened to him describe how he built his firm, it was apparent to me I missed a giant swath of conversation that listeners would like to hear. This podcast makes up for that prior fail on my part.
Fisher explains why customer service is an overlooked aspect of asset management, and tells us what his firm does that is unique. He also describes the stock market as in its “usual unique” position.
He discusses how stock picking has always been challenging, but the analytics to prove by how much simply did not exist. He references Jack Bogle’s 1961 paper — it explained why the cost structure of active management was destined to lose against a low cost index. It took decades before that reality became both understood and well known.
Fisher, a top down student of the market, tells us that P/E has never been predictive, and that stocks are less expensive that people believe. He believes behavioral issues are much more important than valuations.
All of the many books Fisher discusses can be found here.
Hunting with the Bow and Arrow by Saxton Pope
Hunting American Lions by Frank Hibben
Security Analysis: Sixth Edition by Benjamin Graham
Common Stocks and Uncommon Profits and Other Writings by Phillip Fisher
How to Lie with Statistics by Darrell Huff
The Money Game by Adam Smith
The Great Crash 1929 by John Kenneth Galbraith
The Battle for Investment Survival by Gerald Loeb
A radical’s guide to economic reality by Angus Black
A radical’s guide to self-destruction by Angus Black