It reminds me of advice that Peter Lynch makes as well. Opportunities to find such exceptional companies are rare.Īccording to Fisher, the key to successfully identifying such companies is the 'Scuttlebutt' approach which is active discussion with the company's former employees, its vendors, customers, competitors. The problem often has to do not that the price paid was high, but the quality of the company was not high enough to justify the price. Clearly, from a math perspective, this statement is correct as long as the price is not unreasonable and growth is real and sustainable.
Amazon, Netflix, Costco), Fisher advocates that the actual price paid for a great business is secondary to earnings growth. Just like recently investors who have held big winners of the past two decades with all their ups and downs (e.g. The quality of the company measured in the quality of its products, processes, management and personnel, as well as the market it operates in, determines the long-term growth potential of the company, which in turn is key for generating long-term investment results.
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