Fisher investment has built a strong reputation over the years. As one of the most famous economists and investors in history, Philip Fisher put forward many pioneering theories that had profound impacts. His investment principles embodied looking for growth companies, understanding businesses thoroughly, and sticking with winners for the long term. Though suffering tragic losses in the 1929 market crash, Fisher’s persistence in flawed ideas cost him a fortune. In contrast, Keynes viewed failures as chances to improve and changed strategies from macro-predictions to letting capable companies invest for him. This contrast shows being open-minded is key to investing success. In the stock market, strong nerves matter even more than a smart mindset.
Fisher’s pioneering theories and concepts brought him fame and laid foundation for later value investors
Fisher made groundbreaking contributions to investment theory. He introduced new concepts like the time value of money, interest rates linking to capital and investment, and profits generated from price differences over time. His works helped shape modern financial analysis. According to Warren Buffet’s principles outlined in The Warren Buffet Way, Fisher realized a company’s value lies in earnings power beyond balance sheet assets. He also emphasized non-quantifiable factors like management capability. Furthermore, Fisher knew superior returns come from a few outstanding companies, so investors should commit to winners for the long haul instead of trading often. He changed the view from quantitative asset value to qualitative management strength and business prospects.
Fisher and Keynes reacted completely differently to the painful 1929 crash, leading to vastly divergent fates
The 1929 market plunge was when Fisher and Keynes showed their true colors on investing. Fisher was fully confident stocks hit a permanently high plateau right before the crash. Afterwards, he doubled down by borrowing to buy more of the same failing stocks like Remington Rand, believing as an expert he found bargains. Keynes instead treated failures as feedback to improve his process. He admitted predicting macroeconomics was too difficult and unknowable. So Keynes switched strategies to buy stocks with good management for the long run, regardless of economic trends. In the end Fisher lost everything and died bankrupt after clinging to his mistakes. But Keynes became a millionaire and the world’s most admired economist. This shows that an open mind to change views, not intelligence, is key for investing and prediction.
To conclude, Fisher established insightful theories but ultimately failed in practice by refusing to change views. Keynes improved via feedback and flexible thinking. For long-term gains, look for strong companies over cheap ones, stay committed to winners, and keep learning.