Philip Fisher on Patience

Fisher closed his reminiscences by describing what a lifetime of investing had taught him about temperament: the investor's worst enemies were impatience and the urge to act. The discipline to do nothing while a great business compounded, and to keep researching while others celebrated or panicked, was in his account the rarest and most valuable skill of all.

Fisher's selling discipline was famously strict: he held that if the job of buying was done properly, the right time to sell a great growth company was almost never. He advised selling only when the original thesis had clearly broken — a loss of the growth runway, management decay, or a discovery that the purchase had been a mistake. Otherwise, taxes and transaction costs made frequent selling a drag on compounding.

Fisher considered the error rate of trying to time the market on great companies far worse than the cost of holding them through declines. He wrote that the money was made not by buying and selling but by owning — by sitting through the volatility that shook out less committed holders. At the same time he was ruthless about cutting genuine analytical mistakes, arguing that the refusal to admit an error was the most expensive habit an investor could have.