Fisher’s Advice — The Old, and The New

This month marks the 25th anniversary of Kenneth Fisher’s Forbes magazine column, and in his latest piece Fisher offers his thoughts on what has changed — and what hasn’t — in terms of his portfolio management advice.

Among the principles Fisher says he still espouses:

• Avoid overpaying;
• Don’t just rely on the price/earnings ratio as a valuation metric; also look at the price/sales and price/book ratios;
• Compare companies both to the broader market and to their peers;
• Buy quality cheaply;
• Learn from your mistakes;

• Think politically, but unconventionally;
• Size matters — sometimes.

Among the principles that Fisher has changed or added over the years:

• A global focus is now needed, rather than the domestic tilt his column initially took;
• Originally, he says, he “thought Republican”. Now, he’s an “equal opportunity politician-hater”;
• There are times to go to cash, but they are rare. Usually, he says, “getting out is the bigger risk”.

Fisher also gives a handful of stocks he’s high on right now: Yanzhou Coal Mining (YZC), Suntech Power Holdings (STP), Votorantim Pulp & Paper (VCP), Infosys Technologies (INFY), Royal Caribbean Cruises (RCL), and Precision Cast Parts (PCP).