The Redwood Financialist Kenneth L. Fisher
American businessman, founder, CEO and Chairman, Fisher Investments, Kenneth L. Fisher is well known for his investment strategies. He is listed in the ‘Forbes 400’ list of the richest Americans and billionaires, and as the youngest son of Philip A. Fisher, a well-known investor, it’s easy to understand why. He is considered one of the most powerful people of the investment industry and has published a wide variety of works on what he does.
Born in 1950 in San Francisco, the younger Fisher grew up in San Mateo. He started his college career at Humboldt State University with the intention of graduating in forestry but in 1972 he graduated with an economics degree. He was recognized by the university with the Distinguished Alumni Award in 2007 for his accomplishments in the financial world as well as his work in redwood ecology. Upon graduating he joined his father’s money managing firm and in 1979 he launched Fisher Investments. Today Fisher Investments is an international company with branches in the United Kingdom and Germany.
Fisher is interested in more than just investing and trading. His love of forestry led him to establish the Kenneth L. Fisher Chair in Redwood Forest Ecology at his alma mater of Humboldt State University which is involved in the study of the redwood trees, especially the field of redwood canopy study. The Save-the-Redwoods League was given a grant by Fisher to measure the trees using LIDAR and to continue reforestation efforts as well as biodiversity measurement.
Claim to Fame
Besides his contributions to the study of redwood trees, Fisher is credited with testing and identifying price-to-sales (PSR) ratio. He was the first person to use his theory as an investment forecasting device. PSR, according to Fisher, is not as useful today as it was as a pointer of undervalued stocks, but knowledge of PSR is required for the CFA exams.
Why was he successful?
Kenneth L. Fisher has taken what he has learned in the investment and trading field and has developed not one but two major investment strategies that are still in use today. The PSR is required learning material for chartered financial analysts. In the 1980s, Fisher’s company identified and defined the small-cap concept. This was one form of investing Fisher Investments used with their clients.
Fisher has gone on to do financial research that has made a major impression on the industry and he was influential in the study of consumer confidence and stock return relationships. He showed that there is no significant link between the two and that future stock predictions cannot be based on consumer confidence. He has also researched behavioral finance and with Meir Statman released a paper disproving any meaningful link between stock market P/E and stock prices.
Kenneth L. Fisher has written the following investment books:
- Super Stocks (Dow Jones, 1984)
- The Wall Street Waltz (McGraw Hill, 1987)
- 100 Minds that Made the Market (McGraw Hill, 1993)
- The Only Three Questions That Count (John Wiley & Sons, 2006)
- The Ten Roads to Riches (John Wiley & Sons, 2008)
- How To Smell A Rat (John Wiley & Sons, 2009)
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