Interview With Ken Fisher: Masters in Business (Audio)

They run sixty eight billion dollars as an r A, by by some measures, of the biggest r A in the country. Absolutely fascinating guy, really really intriguing. We barely touched the surface of his process for looking at stocks, thinking about investors, looking at the universe, how he runs a giant practice. Really just just amazing, amazing stuff. And after we finished our our interview, he actually had to go to another interview. I think he was on Pim

Fox's show. But we were sitting in the green room chatting. We spoke for another forty five minutes. It literally could have been another episode of Masters Masters in Business. It was that um it was that it was that fascinating. He was really intriguing. I don't think a lot of people in the industry appreciate what he's been, he's built, and I don't think a lot of people outside of the financial services industry really know who he is. He

is a fascinating guy. The digression we have during the podcast portion about redwood forests and and you really just have to hear it. Uh. I can't wait for the next time he's in New York because I have another list of questions that will keep us busy for another ninety minutes at least, just an intriguing, fascinating, UH discussion. So, without any further ado, my conversation with Ken Fisher. This is Masters in Business with Barry Ridholds on Bloomberg Radio.

This week on Masters in Business, I have a very special guest. His name is Ken Fisher, and he runs Fisher Investments, managing over sixty eight billion dollars. He's the second largest R in America. I don't know if i'd buy that. Um. Financial Engines at a hundred billion is the first. I don't know who's between you two, but I think do anything other than a U M. We're way bigger than financial engines. I'm just doings are bigger. We've got more employees, we operated more places, we do

more things. We think of them as they're half our size. They just have They just have more low beat grade A U M. That's for sure. We'll get to that um. In case you don't know who can fish your is. He is the third longest running columnist for Forbes and and soon to be the all time longest running columnist, the longest active, continually published columnist for Forbes. He was ranked in the top twenty five most influential figures in

the financial industry by Investment Advisor magazine. Author of ten books, four of them New York Times bestseller uh number two eleven on the two thousand fourteen Forbes four hundred list. Ken Fisher, Welcome to Bloomberg. Thank you for having me. You know that that that two hundred eleven on the Forbes four hundred is like, you know, I still can't

get above median ever in anything. That's a good list to be median on if you're if you're stuck at two hundred on the Forbes four hundred, they're a worse list to be You know. I've spent my life adoring wealthy people and trying to help them and The fact of the matter is wealthy people need more help, and they have more, more money and more problems. There's a huge world of people trying to help poor people and not enough people trying to help early people. So so

let's get into some of the stuff. I want to talk a little bit about your background and how you found your way towards helping wealthy people. Your dad was a legendary investor. His name was Philip Fisher. Uh you briefly worked with him. What was it like working with a father who was a legendary investor. You know, my father was a very weird person, and you have to

really understand it's fairly simple. My father, in a world before it was known as such, had Asperger's and so he was all of the standard things at Asperger's where he and I got along pretty well. I was the youngest kid in the family, and so I watched him with my elders, and I just thought of him as him. But the fact is he wasn't an easy person to be with because of the things that people with Aspergers

normally are in half. And on the other hand, he was brilliant and he had a quality that because he taught he taught the graduate He taught the graduate investment course at the Center Business School for a while, one of the only three people that have ever done that. And uh, he had this quality that I would hear from his students where he had an ability for people to see themselves through things that he interacted with them on.

And people would say to me, gee, your father told me blah blah blah, and I'd say, no, my father didn't tell you that. My father never thought that in his whole wide life. But he had an ability to get people to see it in themselves and pull it out of themselves. And he did that with me, and he did that with lots of people. And Philip Fisher wrote the classic book Common Stocks on common profits. I assume you've read it. I have read it. I've read it numbers of times. And you've also wrote on the

most recent edition, wrote the introduction to it. I did write the introduction to it. And the first time that I read it, I was about ten. I didn't understand any of it. Ten years old. You're reading a book, Well, it was my dad's books, so I felt like I had to read it, but I didn't understand it. You know, it's like my dad's books. So I gotta read it right, and I don't understand it. But you know, not exactly. Most of my life I've done things I didn't understand. Well,

we'll get to some of that. Um. Speaking of your dad, you obviously inherited your father's writing skills. Not true, Not true? Why do you say that? Because if I inherited them, they would have come to me naturally. I worked very hard to learn how to write. Well, you inherited a certain range of writing skills, and you worked your way up. No, no, no, no, I was I was alousy writer. So I hired somebody to teach me how to write. When was that? And if you say Tuesday? No no, no, no, no, no

no two. Okay, So before most of your books were written, before any of my books, before most of your columns were written, So conquer. I believe you your genetics or clay, and you could mold that clay in different directions. So clearly, having a dad who was a skillful and articulate and insightful writer, there's a worst set of genes to start. Oh no, no, no, no, My father was great and

I my father had more marvels callities. My father was the very best, among other things, bedtime storyteller of her. This man told the most marvelous stories every night when it was time to go to bed. And what I didn't realize he was doing when he was telling me these stories, most of which he made up himself, was he was telling me who he wanted me to be when I grew up. So there were parables with Yeah, the guy he was, he was, he was, he was marvelous.

But uh, you know, I got parts of me that are my father, and then there's parts of me that are just me. And again, I no problem with my father in any regard. But we're all ourselves and we have to make up for our deficiencies, and we have to play on our strengths. And you know, he had his eye of mine, and that's just the way life is. So let's let's talk about some of those strengths, and

we'll talk about you're writing. How important is writing to your entire process of thinking about markets, thinking about stocks? How significant is that regular monthly column and and everything else you write? Well, you know, I think I read from some guy named Rid Holts or something that uh, you know, it helps you clarify your thinking when you're right. I've stolen that from Daniel Boston Library to Congress. I right to figure out what I think that's That's where

I took that from. And the fact of the matter is that I'm not as prolific as you are. But the writing forces me to think about what is it that I want a million people to be able to read that they will be able to come back and shove back at me three years later if they won't. And uh, Forbes has been a perfect podium for that.

Writing books is good for that as well, because you really have to commit yourself and say this is what I'm ready to have you come back and attack me for You're listening to Masters in Business on Bloomberg Radio. My guest this week is Ken Fisher. He is the founder and chief investment officer of Fisher Investments, a sixty eight billion dollar asset management shop out in the Pacific Northwest. And you you basically you are national, correct, You have

offices pretty much all over We're global. We global. We operate about four billion in high net worth in Europe and we do institutional across to where we have clients in six continents. Half of our thousand two thousand employees are in Campus Washington, just twenty minutes from the Portland, Oregon Airport, and then there's about five California, and then the rest are scouted around Europe. So I want to give you a quote because I of yours that I really like, and I want to have you discuss it.

When you give up control, you give up quality control, and that is deadly in the financial services business. Explain what that means? Well, you know most of our realm of endeavor. I don't really like the work industry, for what goes on in finance is a world where the

people in markets like to have free reign. And when you let people have free reign to do what ever the dickens they want, and and you have a lot of them, some of them will get you in trouble, and a little bit of trouble in the world of intangibles sinks you. The fact of the matter is integrities everything, and you only get integrity through control and not letting the blow ups occur that happen. You get a lot of great people that are great, and that's all fine,

and they deserve free rain. But you can't really give people free rein You need to build around people that don't want so much free rein, because if you have two thousand employees and you give hundred of them free rein, there's going to be a hundred of them that at some point in time will be the ones that will cause you to have the sec on your back. This on your back, that on your back, and at that

point in time and intangible that kills you. Control is about quality control, which is about in a world of dealing with the public in a world that's regulated and intangible. We're not selling coca cola in in a world of what's a service business where integrity ends up being crucial to your outcome. The greatest investors in the world have bad years, and bad years are just normal, But that's

not what I'm talking about. I'm talking about having control of the process while you're having the bad year, so that you actually are delivering what you say you're delivering, and that there's no lack of control that goes haywire, because once that happened, you know, in my life, I've

seen so many firms that went bankrupt. So there's a huge difference between having a bad year and having a bad process that can run amuck and allow certain people or processes or vendors or employees to damage your own reputation. The reality and this business is you need control so that you deliver consistently with what you promised you would deliver, which is not a return number. Here's what we do, Here's how we do it. Here's what we're gonna be trying to do for you. Here's where our bets are

going to be. If they screw up, they screw up. But they are what they are. So it's about a process and sticking to that process. I'm not promising an outcome and also not letting a whole bunch of employees go do whatever they want to do in the realm of endeavor that is investing. Too many people think of it like it's a doctor's office, rather so that you let the doctor go do whatever he wants, not the doctor actually operates under a set of processes. Your card

to by law. Uh and and have hypocrite hypocritic hypocritic oath. But the fact of the matter is, uh, it's not a doctor's office. In our realm of endeavor. You can't let these people do whatever they want to do. You need to build a machine that delivers something that's consistent with what you promised the customers you do. So let's talk about that machine and the team you put together. So how did you start finding people to help you build this machine? Well, I was incompetent, and I didn't

know anything, and I was young. So all I could do was hire people who were younger than I, who had never done anything, and whose older people don't want to work for me. And so I hired kids out of college. And I've hired kids out of college forever.

And then in the world that I came from a long long time ago, kids would come out of college and then they would go to work for some company like dal Chemical or IBM, and then they, if they were successful, they go to a tenure training program and they become a career tal chemical person or IBM person

or something like that. And that world blew apart when I was a young man and they weren't doing that anymore, and instead of people were looking for MBAs, and then they hired the m b A. I mean when I graduated from college. You know, we we we create more NBA's every year now than we're created in all of history. Before I graduated from college and nowadays, I want to

hire an MBA, you know. And then two years later the NBA changed his jobs, and two years later they changed jobs again, and two years later the CHAN And they think that's what they're supposed to do, and there's no particular loyalty between the firm and the employee and vice versa. What I wanted to do when I saw that blowing up the old model blowing apart, is I wanted to hire kids, train them, keep them forever, and

have them never leave. So if you look at our firm, most of the people, all pretty much all the people the top firm never worked anywhere else. I get them out of school. Half of them turn over in the first year. Uh. If they succeed and stay, they might be here. They might be higher up, they might be

higher up. But all of the top people in the firm, uh, with a very couple of exceptions, have been with the firm all their lives, all their adult careers, and and and they they're kind of have the firm built into them. So let's talk a little bit about that is very little education. They've got no training, they've got no background, they've got no experience except they've been with the firm forever, so you've educated them, You've given them experience, and you've

trained them so they know they can fisher way. Except I didn't know anything either, so we kind of had to learn it together. Sometimes it's uh, that's the only way you can. You can do things. You you created the sort of firm that didn't necessary only exist. What what did you have as a comparison when you first started? How many years ago? Thirty years? Right? Yeah, I've been at this a long time. Uh, and so what was the model for you to to think about when you

were building this? On the one hand, uh, Intel and on the other hand, Charles Swap Uh, what I wanted to technology on one side and discount brokerage on the other and in both cases doing things that people otherwise hadn't done yet. My father, my father had a great line that always stuck in my head. Uh. It was just one of his most marvelous lines, which is, what are you doing your competitors aren't doing yet? Implying that

you do it and they're gonna follow. Maybe maybe they'll catch up, maybe they won't, but they're not doing it yet, and you're leading. And that concept as a phrase is one that just kind of had in my head forever. And you know, if you look at somebody like in Hill, they always believed they had to be moving steps ahead. If you look at somebody like Schwab in the early days,

they're doing things nobody's ever done before. Uh. And they did successive waves of that under under Chuck Schwab personally. And uh. You know, I'm talking about the Intel of Old and the Charles Schwap Bold and uh so those are those are two firms in my mind, neither one of which are conventional Wall Street firms. That's fascinating. I'm Barry Ridhults. You're listening to Masters in Business on Bloomberg Radio. My guests this week is Ken Fisher. He is the

founder and chairman of Fisher Investments. He is one of the longest running columnists at the Forbes magazine. He is well known and well regarded within the financial industry and and is also in the back half of the Forbes four hundred list. Uh. We were talking previously about uh writing and how it's impacted the thinking process. I want to talk a little bit about some of your books, but probably my favorite book of yours is the only three questions that count. Let's let's talk about that and

talk about how did you develop those three questions? What led you to that holy trinity? Well, fundamentally, after a long lifetime of kind of messing up on things, I've kind of introspectively tried to learn about what I screw up on, what I don't screw up on, and and

learn from it and get better over time. And so one of the fundamental questions in our world is there's so much conventional wisdom that ends up not working in market places because market's discount all uh widely known information, and conventional wisdom, by definition is widely known information and therefore priced that uh, simple question like what do you

believe it's actually false? Is such an obvious one to think of, and yet it took me forever in my life to get to the point where I realized that I had to be thinking all the time about what do I believe it's false? Uh? And then the next part, in the futuristic sense, is what can I fathom that other people aren't fathoming work, which allows me to then be ahead of the pack. Let's let's talk about both of those, because they're sort of two sides of the

same coin. What do I What do I know? What can I fathom that other people haven't is really a way of saying, what can I see that the crowd hasn't picked up on? I want to get ahead of the crowd, right, But the first question is really fascinating, which is which one of my fundamental beliefs is actually false? How can an investors only have one I'm doing really good? Or which one of the many? But the question I wanted to ask is how can an investor, through their

own introspection figure out how many of their beliefs are false? Nor? You know, the old famous uh Galberth quote is when when presented between a choice of changing their minds or or I'm messing up the full quote, everybody gets busy on. The proof is that people would rather spend a lot of time and effort dancing around the fact that they're wrong and looking for ways to rationalize those bad choices, thoughts, decisions.

How can an individual man that was a mouthful, How can an individual identify thoughts of their own that are incorrect? And so? Look, look a there's multiple ways, but let me just go with the easiest. The first is, of course, identifying what do you believe. If you can't do that, you're in real trouble and you probably shouldn't be in

markets at all. Secondarily, by the way, that's a key point, and I think a lot of people gloss over that if you don't really understand what you believe, the markets are absolutely absolutely no, no, no. You know. The age all saying is if you don't know who you are, the markets are an expensive place to find out. And the fact of the matter is that once you say, okay, I believe this, now you kind of list those things and then you say, this is a really simple one.

It's really one that people have a hard time with. Is there a history that associates with that thing? And can I run correlation coefficiens to see if it's actually true or not? Because if it's true, it will have a high end positive correlation coefficient. If there's no correlation there,

it's not true. And so you know, not everything can you run a correlation coefficient for, But a lot of things you can, particularly X causes why functions where there's data, and so wherever you do that, you look for here's the things I believe, here's the things where there's history and data, let me run the correlation coefficiency if it's actually true, and if it's not true, let me stop believing it. So you want investors to actually use numbers

and think about what's true and what's not true. Yeah, it's really simple that that's going to take a lot of a lot of easy money out of the market off people actually think about. I can't tell you how often I hear people or read people saying stuff that I have a familiarity with, and I'm wait, that's not true.

And not only is that correct, but additionally, in my forty plas yers, in this realm of endeavor, I've seen, particularly in the last fifteen that it is more true than ever that people have these ideas, hold these ideas, and never ever stopped to say, and I'll give you an example one in a minute, never ever stopped to say, I wonder if history could be a guide here where I would use data to check myself to see if this is even possibly true, not to say that there

can't be first ever, and there can. But you remember John Templeton's famous line that the foremost dangerous words in English language exactly, and the fact of the matter is you take something like all of the fear about an initial interest rate hike, but gee, an a logical question would be, g has there ever been an initial interest rate hike before in a cycle? Can I find those times? Can I count them? And then can I measure on a one week, one month, three months, one year, and

five year basis? What's happened to the market after that? And the answer is a you can and be If any of your listeners do that, they're gonna be startled to find out that the market outcome doesn't have anything to do with any discussion that goes on right now in the public. You're listening to Masters in Business on Bloomberg Radio. My guest today is Ken Fisher. He is a money manager, author and rock on tour. Uh. And we were discussing previously, uh the only three questions that

count a book? He wrote, God, that's gonna be about a decade ago, is it right? Um? Almost? Let's talk. But you're known your your reputation is that of a stock picker. Not too long ago, Forbes published an accounting of all your stock picks as made in your columns and over the previous decade and a half, they found that on average, the stock picks had beaten the SMP five hundred and you had beaten the index eleven of the previous fourteen years. That's a heck of a great,

great run. So let's talk a little bit about about stock selection. Um, what's the first thing you look at when you're picking stocks? I don't look at stocks. You don't look at stocks. I mean, eventually you've got to own stocks, but looking at stocks is kind of the last thing I do. So where do you start where I'm in the process. People don't understand this about me because they always are looking for what they want to see.

But in reality, I'm very simple, top down macro manager, and I've long, long, long, not always, but long, long, long been a top down macro manager. And I didn't start out that way, but I evolved to become that

a long time ago. And so the first thing that I look at is the whole world, countries, sectors, subsectors, and I figure out where I want to be because one of the things that I've come to believe heavily is that it's the kind of stocks that are moving that are more important than the specific ones you want to be fishing in. The right ponds, not the wrong ponds. If you're fishing in a pond that doesn't have the kind of fish and it's the wrong time, you're not

going to get fish. And so my first thing I look at is countries than sectors. Uh. Then I break that down. I look at factors then, which would be big, small, growth, value? There's times for each of them. People tend to be a value guy or a growth guy, or a big stock guy or a small stock guy. I'm not in any of those things. I'm let me figure out what kind of stock should be working, where is the value that will be perceived in a few years, and where

does it fit into the cycle. And then that gets me down to a very small universe of stocks to pick from. It's the picking of the last thing I do. So this is very much along the lines of what can I fathom that others can't or or think. The actual picking for me is much more simple than most people would think, because I've weeded out everything but the kinds that I want. And then even if I picked the long ones out of the kind, if I picked the kind's right, I'm ahead of the games. Makes a

lot of sense. You You if you don't get the best house in a good neighborhood, you get the second best or third best. It doesn't matter. It's still a good neighborhood. Location, location, location in that regard. And this is a kind of a parallel analogy. So if you're not starting by looking at individual stocks, when you're looking at different regions and different sectors, what drives that selection process?

So you know, uh, this is not to uh take anything away from the perception of Warren Buffett's business interests. But one of the things I don't think that people think of him as is he's just one of the best words smiths ever. I mean, he just creates. You know, it's one thing you write, I write. It's one thing to write things that people like to read. It's another thing to write short phrases that people quote over and over and over again and like to And that's what

I mean. You gotta be Yoggie Bearer to do that successful. And the fact of the matter is that one of his great lines is the in the long term, it's a weighing machine, and the short term it's a voting machine. And the the weighing and the voting have to both be counted. So the weighing is about the true valuation of the quality of earnings, growth, etcetera, the correct valuation

for that. And then the voting part is really a matter of analyzing sentiment and where sentiment is swinging and how you measure sentiment correctly, which is something that I don't think most people think about much. And Uh, so you're looking at features that on that break into fundamental economic drivers. One of the biggest ones that I always pay attention to his shifts in the Yelk curve globally, which most people don't think of. People underestimate the power

of the Yeld curve. Uh. The functioning Uh simply of where we are in the length and duration of the cycle, because different kinds of stocks performed differently at different parts of the cycle. That's part of the voting machine. Uh. And then what is it that And you know, I've written a lot about this. People never really ever believe me professional forecasters as a group can be analyzed. And if you can figure out what they believe will occur,

you know exactly what won't happen. You don't know what will happen, but you if you think about it like a clock you can take about three hours of the clock out, which stacks the odds more in your favor, because what they collectively believe is what has already been priced into the marketplace makes a lot of sense. And and since it's been priced, it can't occur. It's already been done. So now you're looking for what else there is.

And so one of the things that we always do is spend a lot of time collecting professional investor sentiment about sectors, about countries, about the market as a whole, and arraying that into bell curves, and knowing that twelve months out the middle of the bell curve doesn't happen. We don't know which side of the bell curve happens. Could be the left, could be the right. We got to try to figure that out. Might be wrong, wrong

a lot, I mean, I'm wrong a lot. I'm basically, you know, kind of the forest gump of the world. It gets there by running backwards with blindfolds on. But the fact of the matter is beforest gump of the finance world. But I mean, you know, I went to Humboldt State University. I didn't I didn't go to Wharton, right, um, But but when when you say that, I'm gonna push back a little bit. People don't realize in this industry, if you're right three out of ten times, it's like

batting three hundred. Hey, you're you're up for the All Star team. It's not how often you're right, it's what you do when you're wrong. You could have been wrong frequently as long as you're controlling the downside. But when you're right and they're towering home runs and you're batting three hundred. To carry out the baseball analogy, that's a great on base percentage. That's a great scoring percent Let me let me take that and push it to the

other extreme of the same story. Uh. It's long been proven that investors are, on balance more wrong than right, for sure. So if you can be more right than wrong, you're doing really good. Uh. Some investors are not many. Uh. The more right you're expected to be, the fewer you get. If you can be right seventy of the time, you become a living legend in the long term. And so therefore you better get darn used to being wrong at

least thirty percent of the time. And if you can't take being wrong and figure out what to do when you're wrong you. I mean, if if you think you're going to be right all at darn time, you are the wrongest person in the whole world. And the reality is that so many people are so hung up on

not being able to accept their wrongness. And you know, I've embrace my wrongness because fundamentally, I know that if I was the greatest investor ever, which I know I'm not, I'd still be wrong a huge amount of the time. You know, I learned early in the career it's a it's okay to to be wrong, it's not okay to stay wrong. And I think a lot of people have a hard time with accepting an error, fixing what has

to be fixed, and moving on. If you don't do that with your your golf swing or your your tennis swing, it affects your game if you That's why I don't play golf or tennis. But if you make the same mistake in finance and investing, it's usually expansive, and that's that's the that's a huge, huge difference. Let's um, let's keep plowing through this. I want to talk about UM. Something you had said back in oh six, eight percent of clients need an all equity benchmark. Is that still

true today? Uh, it's more true nowt and what's done more true now than ever. So, so how does that express itself in in portfolios? Are you carrying very little in the way of fixed income or reads or other non equity positions. Let's just back up from that. The benchmark is about what it is, because that's the way you phrased it appropriately. The benchmark is about what it is you're trying to accomplish against. It's kind of like

the track in which you're going to run around. Are you running, uh, long distance, you're running short distance, intermediate? What's the benchmark you're running. We can come back and talk about why that statement that you referenced is true. But then there's a reason to vary what's in the portfolio from the benchmark, because you're hoping to do well

compared to the benchmark. And so in a simple case of somebody who would be in all like by benchmark, the time to vary from the benchmark is if you think you're gonna have a big bed bear market, and then you might vary from Then you've gotta have good reasons to do that, because if you're wrong, you're gonna get left in the dust. But you can vary from the benchmark all you want. I am and have been

now for years, you know. I mean, I've been only seriously Barris three times ever in my career, and I'm not bearished now. And I've thought of often as a permeable. I'm not a permeable. That's your reputation. But I know you've I know I've nailed three bear markets, and I've missed bear markets too, and I missed the last one. I got O O nine. But you were pretty cautious heading into two thousands. Oh, I nailed two thousand. I nailed two thousand really really well. I'm and and was

not non equity in that period. What are the bear markets? Did you catch just right? I got eighty seven pretty well. I was fifty percent equity in eight seven, and I was pretty good about seventy equity in UH to sixty equity in the small bearer market. But but you know, you don't have to get all the bearer markets because

in the long term there's lots of bearer markets. If you carve out a few bearer markets and otherwise are equitized UH, you end up doing better than the market, because fundamentally, if you can carve a few out and you sta equitize the rest of the time, since stocks, you pretty well in the long term. It's not a bed function. But the reason to vary from the benchmark, whatever the benchmark is, is I think the benchmark is going to do really badly. That doesn't make the benchmark

inappropriate for the client. The fact is the reason people need. You know, in this day and age, we've got a phrase it didn't used to exist, called longevity risk. And longevity risk is about the fact that the guy, I mean a long time ago when people first did pension plans, you know, you're retired at sixty five, you died at seventy, and you've got five years worth of your pension payouts. And and nowadays you know the sixty five year olds

likely to live to be ninety five. And if you've got a thirty year time horizon and the primary person of your money is take care of you the rest of your life, you still probably need a heckuple lot of equity exposure, subject to other factors, because you've got a long time horizon and equities you know, as soon as you say long time arise and that's where equities fit in. So you talk to a standard client, you say, so,

what's the primary purpose of your money? And then they tell you And the most common answer you ever here is well, it's to take care of me and my spouse the rest of our lives. That's you got anything else? May I want to leave some money to my kids, anything else? Them? I want to leave some money to charity. These are standard thing here them all the time that I want to take care of me and my wife the rest of our lives. The next question is, so how long you're gonna live? And it's not a matter

of your age. It's a matter of things like, so, how long did your parents live and how long did your grandparents live? And what's your lifestyle in terms of health issues compared to theirs, And then you try to figure out how long they're likely to live. And then from that you go to these subordinate features like leaving money to the kids or what have you, which actually extends your time horizon, it doesn't shorten it. You now

you're not thinking even longer. And and once you figure out that time horizon, if it's a very long time, and of course you commonly run into this thing where well, you know, I'm sixty five, okay, Grace, and how else your spouse, because take care of you and your special My spouse, she's only sixty. Uh, and how long you're gonna live? Oh? Well, you know, my parents died when they were seventy three, and you know, blah blah blah

blah blah. And I smoke a lot, and I'm overweight, you know, and and you know, I try to drink a lot of poisons. But my spouse, she's sixty and her parents lived into their nineties and their grandparents lived into their late eighties, and she's in great health. Is I'll probably live to be ninety five. And you had a thirty five year time horizon, and let's take care of the both of you. It's the second to survive that counts in its longevity risk for the second to survive.

And what do they need? They need an equity benchmark. Fascinating. We've been speaking with Ken Fisher of Fisher Investments. If people want to find your writing, they could either go to Forbes or fish fi dot com. There's a slew of your writing available. There is that correct, absolutely plus Amazon or Barnes and Noble. You have books eleven. We should really get one more out, making an even dozen

eleven books. You know, hopefully I'll live that long. Eleven books for New York Times Bestsellers, thirty one years of Forbes columns. There's actually a book about my first twenty five years of Forbes columns. I don't remember I was reading it, and I can't read. I don't remember, you know, But the fact of the matter is I don't have very good memory. I'm you know. I told you I'm basically kind of the forest Gump of finance. Right. It's a miracle that I'm even here. Check out my daily

column on Bloomberg View dot com. Follow me on Twitter at Ridolts. I'm Barry Ridholts. You've been listening to Masters in Business on Bloomberg Radio Masters in Bisines. This is brought to you by ex On Mobile Energy Lives here. Welcome back. This is the podcast portion of our show, and I've actually been really enjoying my conversation with Ken Fisher. There are so many questions I skipped for time purposes. We're gonna come back to this um, but let's let's

talk about Let's start out with some of the books. Um, you just mentioned the book. Quiet, Let's talk about other books that you've read, either finance related or holy unrelated that you found to be helpful, insightful, worthwhile what what what are some of your favorite books? Um, Hunting with Bow and Arrow by Saxton T. Pope Hunting with Bow and Arrow? Interesting? What what was that about? Exactly what

it says or something? Well, Saxton Pope was the kind of the father of modern not modern American bow hunting. And when issued the last Native America was brought into uc med in San Francisco. Uh, and I recalled nineteen eleven. Uh. Saxton Pope became his doctor and if she taught Saxton Pope how to make a bow and how to hunt all on, and then he went on to become this famous bow hunter. And he wrote this book that includes

all that. But if you think about hunting, and I'm not a hunter, but if you when I was a kid, I wanted to be a hunter, but I was just a kid. When I was a kid, I want to be a professional baseball player too, And that was ridiculous. But every kid in the fifties want to be a professional baseball player. The fact of the matter is that

hunting is a lot like investing. Let's expand them that why why So if you go back to things that I said in the prayer segment about you want to fish in the right pond, you gotta figure out where the animals are gonna be that you're gonna hunt. You gotta make sure you're going after the right kind at the right time. Uh. And then you gotta have the tactics for how to do the final part, which is actually the last part of the hunt, which is what happens when you actually get close to it. And so

it's really kind of a parallel. Another one of my favorite books, again that that book was written in the nineteen twenties. Another one of my favorite books, which is written in the forties was called Hunting the American Lion, which is a book about mountain lion hunting. I've never handed a mountain lion. I'm not going to hunt a

mountain lion. But but it's a great book because it's about the long, arduous pursuit because hunting mountain lions, you know, which is always done with dogs, and the terrible to rain because the cats want to lose you and they're very smart and are very mean. You know, these are critters that can jump twenty feet straight up in the air. Um. Pursuing inquires endurance and investing is an endurance game. Another one of my all time favorite books. Of course, I

love these parallels. These are fascinating today. Uh. And then you know there's investment books that I love a lot. Um. You know Fred Twins where the customer shots literally sitting on my night table. Book I started and and and it's available now is a wily classic. And before I forget, if anybody ever wants to go to our website, uh,

you know, it's to a Google search officier investments. Uh. You know on the website there's uh access to and I don't remember exactly where you find it, but you find it on the first front page, access to resources. And on the under the resources there's a list of my all time favorite books. And so you know, I can't rattle them all off in three and a half hours we have ahead of us here. But um, but but the fact of the matter is they're they're all

listed there. But you know, in other one's how to Lie with Statistics by Darryl Huffing Table, no one would believe me. That is literally it's a great book. I've been I've been rereading and I read it a long time ago. It's charming and if you didn't know it was written forty years ago, you would have thought it was written last week. And you can read it really

really quickly, very quickly, and it's a delight. Uh. And then of course How to Succeed uh excuse me, uh, Think and Grow Rich by Napoleon Hill, which is a classic book about learning, among other things, how to use his mastermind principle to guide yourself. Uh. And then there's a course of classic investment books by the classic people that we all know. And you know you could rattle those off for me as well, but you know, this

would be Graham, this would be I mean I adored uh. Oh. When let me point out another one that you can find you can find used online, which is John Templeton's book that's not about investing but about spirituality. It's a great freaking book. What's the what's the name of the Humble Approach? Humble Approach by John Templeton. I adored John Templeton. I knew John Templeton a little bit, and I just

thought he was the coolest guy. I mean, this guy was calm and steady and gentle and thoughtful and everything that I'm not. And he was. I mean, you seem fairly kind and you've been Do I look calm, look at me, Look at me, Barry, Do I look calm. You're you're sitting You're sitting motionless, your hands are folded in your lap. I've got your voices over control. But I have to do self control. I don't think John Templeton had to do self control. I think he had

it spiritually. That he was much more zen than you. Is that what you're gonna say? Uh? What back zen? Back zens? That was true? So um so that's that's really interesting. The John Templeton I visited I've never read. I visited him in the Bahamas this one time, and he lived he has little office over this it was lime green colored over the police station. And uh, he's

the most humble guy. And this is one of the most successful guys ever, and and and and he doesn't have the prolific quality of phrases that everyone knows that Barren Buffett has. But he had some great lines, you know, including the one that we used earlier in the segment about the fore most dangerous words. But the other, you know, another one that of his that I use over and over and over again is bullmarkets are born on pessimism, growing skepticism, ature an optimism, and diet you forhor you.

And while that's not always true, it's true pretty often. I was gonna say it's pretty for a general statement, it's a prett pretty good one, and it really sums up there's a huge amount of contrarian thought in fact, that goes back to um, that goes back to what

do I believe that's wrong? What do I know or what can I fathom that others can recognizing that bullmarkets are born on pessimism and Diane euphoria, that's a huge juge insight that I think a lot of people can glibly say, but you have to kind of live through it to really understand how true it is and be able to step back and take a look at it. I can't tell you how often I've had people give me these aphorisms and you know, I'm I'm making the yapping gesture with my hand, but then when you watch

their behavior, they're just completely oblivious. Being able to truly understand that internalize it is is harder, easier said than done, So let me offer a clue for that. Behavioralism teaches us that we're prone to activity, and in fact, behavioralism in finance teaches us that the less decisions we make, the better we tend to do, absolutely, and that the more decisions we tend to make, the more bad decisions

we tend to make. And most people don't have that part that says I'm making a decision now, the odds are I'm probably wrong, let me slow myself down. The fact is most people want to do it, get it over, move, let me make the bat and uh. The reality is that those kinds of features like the gut instinct, they want to fly in the face of these simple concepts like born on pessimism, growing skepticism, mature and opt to

die of euphoria. Before you go and make the decision, you want to stop and say to yourself, so are we in a euphoric world or not? And how would I measure that? And am I really sure I'm right about that? And let me think about that a little more before I go do something. And that's hard for most people to do because they just want to jump to the conclusion and then they want to be right, and again, most of the time we're all wrong. I

love the expression don't just do something. Sit there. It's an inversion of what what people typically expect, even lie down. So let's go back to the three only three questions. That the problem is when I lie down, I always fall asleep. That that's that's a potential issue. This this is a nice carpet to stretch out on um on the three only three questions account we didn't get to the last question. We kind of did. Just now, well, that's what made me think of coming back to it.

What is my brain doing to mislead me? So so let's talk a little bit about the various things your brain does to mislead. So, every part about us, and this is really hard for the human to accept, but every part about us is stone age. That is, our brains are still stuck evolution wise in a world that what we were set up to function in very well,

and we did function in very well. I mean, if you, I mean the human is created to dominate nature, and we pretty much completely have and no other species lives in every square corner of the earth completely dominates this environment. And has the ability to utterly change it to its liking. We are the only species on the planet. So I'm

going off in a different direction here. But and your listeners wouldn't know this about me, But I have more scientific and technical background about things that relate to wilderness than most people in the world by a wide shot. We're going to get the redwood trees, and not just redwood trees, tall conifers wilderness. There is no more area anymore that hasn't been touched by the interplay of humans

with biotics. That is, if you go into the most primitive wildernesses, there is evidence of things that have gone all around the world and are now in those Nature is no more truly primitive. It's now been touched and affected in some ways, not not not necessarily intentionally or actively. Not necessarily. For example, with the chainsaw, it's just stuff that blows in the wind, it's just stuff that birds drop, it's just stuff that happens, but it's there. We're gonna

come back to that. Let's stick with the the human brain. Um, I'm fond of saying saying something similar to what you just said, which is, you know, we use the human brain for off label purposes. Most people don't realize. Um, there was an angina and hypertension medication that had the side effect of causing significant erections in their users, and it turned out, Hey, this hypertension drug, we have a different purpose for it, and it became VIAGRAA was originally

designed for something completely different. They call that off label use, but the human brain is similar. So perhaps a less uh, a less racy version is bena. Drill is the allergy medication, and it's used in essentially the key chemical, and that isn't used in all the sleep medications because allergy medicine makes people drowsy. Hey, here's an idea. Let's take the allergy medicine put it in sleep over the countersleep aids.

So our brains are being used to make risk reward decisions in the capital markets when really their purpose, as you described it, is keeping us alive in a changing, challenging environment. Let me give you an ancient analogy and translate that into modern finance story. So modern finance theory would say that markets are discounters of all known information, and what everybody's working about talking about focusing on is very quickly priced into markets and then loses its subsequent

pricing power. There's nothing novel about what I just said. If you think of where we come from, our stone age bodies are easy to understand. If we think of ourselves around an ancient campfire, uh, and at our campground with the rest of the people that we've known very well, and it's night and it's dark, and outside that campfire, in the dark, we hear a loud noise. What do

we do. We turn and look towards the noise to make our ears hear it better, and we focus on it because we can't see so well on the dark, and our biggest risk at that moment in time is what's behind us, not what's in front of us. And if truly we were being attacked by an enemy force, they'd want to make that noise and attack us from the rear, or maybe attack us from the side, but

not attack us from the front, and they'd create that diversion. Now, in markets, what people want to do is figure out what everyone else is worrying about, and then not worry about it because they're already doing it for you as a free service. Send them a little Christmas card and

thank them for it. You've worried about this stuff for me all year long, and therefore I don't have to do it, thank you all, and it's already priced, and instead you worry about something else that's a such a time saver, so consistent with finance theory, and so hostile to the way we normally think. Look at all of the noise and attention that you can see today in the media right now about everything about the French terrorist attack, which is a tragedy about it a borrn in always.

But as soon as you see that attention, and of course we have a long history of terrorist attacks, we know they really don't move markets, and you see the market since then launch it off. Why because everybody else is worrying about it. You don't have to worry about something more important to worry about what they're not worrying about. And that's the part where you want to worry about it.

That's your brain blindsighting you now, because listen, these big emotional events naturally draw people's attention, even though you know that I'm again I'm fond of saying what you think, what we worry about are rarely the things that do damage to us or our portfolios. I can't tell you how often I read people making forecasts about here comes seven like crash. Well, you know you get crashes or certainly bear markets on a regular basis, But that's not

really what seems to her most people. What hurts most people are the access trading, the high fees, the turnover, the mistakes we talked about. You mentioned earlier that people make time and again and they don't really seem to pay attention to their focused on the noise outside the campfire. Let me let me give you a different parallel to that. Please, there's a famous set of studies that people don't seem

to pay attention to, put out by an organization. You're probably know these very dal Bar and the dal Bar studies show that people actually do worse than the funds they invest in by a lot, and that in fact, in some of the studies, they show that people invest in load funds do better than people invest in no load funds, not because the funds do better, but because they feel imprisoned by their load fees and they hold them so much longer, whereas the people in the no

load funds trade them in and out at all the wrong times. And while the no load funds do better than the load funds. The flow of funds actually favors the people that don't flow the funds. They just sit And that's that part about you know, stop doing something, just sit there, and and that reality is the same thing. It's this part where people in and out do themselves in and it's regardless of cause, reason, this thing, that thing. But as soon as you see everybody else where, you

can take so many examples. I spent a fair amount of time in front of large groups of our customers because we do large client only seminars all around the country, uh, client only seminars where they get to ask questions endlessly. The questions are almost not always, but almost always it's almost exclusively about what's been in the news the last forty five days. And there often the ones that are evergreen,

ones like but isn't the debt a big problem? And then you say, so, how many people haven't heard we have a debt problem? And you know, you get you know their reaction, and then so therefore you know it's priced and therefore you know in terms of markets. Now, so let me just give you one more real quick please, long term problems way down the road markets don't care one darn about those because markets don't believe it. Markets don't discount things fifteen years from now. They're not they're

not gonna, you know. They worry about more or less, more or less the next three to thirty months. And you know, the French terrorist packets over, you know, but we have more terrorism, climate, climate change down the road that's not the next three thirty months. The bankruptcy, have social security, that's not the next three to thirty months.

The darn millennials that are no darn good. Well, you know again, I don't know about climate change, and I don't know about millennials, and I don't know about the bankruptcy so security. What I do know about all of them is they're not going to impact things in a hugely terrible way in the next three to thirty months.

And everybody else is worrying about them, so I don't have to because it's priced in and with much more concerned with what's not priced All right, So let me come back to some of the questions, um that I missed, uh, and you mentioned these client events. How often are you speaking to clients? Is that a regular we we we have people don't notice that. I mean, I got a lot of people are pretty critical in my firm, but they don't know my firm. We do more client service

offerings than any other asset management firm. And you have you have last I checked, sixteen thousands something like that clients or is it five thousand I'm looking at old data. So you have thirty five thousand clients sixty eight billion dollars. So you have to be doing these events. You're not

taking phone calls. You're doing big events pretty regularly. We have a whole variety of different types of events for clients, but one of them is where they'll be two to four people in a room for a lunch or a dinner. There's a presentation and then a Q and A. We do uh, seventy of those around the country a year, seventy seven. Oh, but I don't do seventy. I do about twenty uh. And then we've got other people in the firm that senior people in the firm that do

them as well. Uh. And I believe that interacting with the clients is important for every CEO in the world, because if you forget who the customer is, you lose the bus. No, I'm I'm amazed at how many ceo spend no time with customers and that that's a serious mistake in my opinion. And let's talk a little bit about that, because I'm I'm intrigued by the idea not only of getting out in front of clients, but what

competitors are doing wrong. You've said some interesting, interesting things about competition and staying uh, And I'm looking for my specific question that I had on on competition. You how closely do you pay attention to what your competition is doing? Some? Not much, a little? And who? So who is your competition really? Uh? You know, it depends where you're talking about. In the United States, it's almost everything in the world, because the United States has such a diverse and diffuse

financial services world of offerings. Uh. In Europe it's just the banks, Uh, in the continent of Europe. In Britain it's in between. And because I'm truly in so many things, you can say America's here, the continents there in Britain's kind of halfway in between. But Uh, in reality, the industry is very diffuse. Very little of it thinks like

it's really a business. It thinks like it's a practice and too much of the world wants to focus I'm not suggesting that investing and investment returns shouldn't be very importantly treated, and they should, but you want to do all of the business disciplines in a very excellent way, because in the end, it's about returns, it's about service, it's about convenience, it's about all the same things that are in every other part of consumer services. And people

forget that, and they forget that. I mean, I learned this as a kid when I was you know, before I ever got to this part of my life, when I would be analyzing companies, and one of the ones that I was very close to in its early days was new Core, which is, you know, today's largest U steelmaker, and kenn Iverson was determined that New Core would be excellent at everything. Now I don't mean necessarily the best at everything. You can't be the best at everything, but

excellent across the disciplines. And also, you know, I mean all of the great firms in the world are excellent across the disciplines, and in the realm of finance, people mostly kind of forget that. That's how you want great service, you want great pricing, You want great investment stuff, which includes great research, But you want you want great hr,

you want great internal finance. You can't you know, investment firm isn't going to try to be the best have the best control, financial controller and treasurer in the world. But you better have a you better really make a point to be across the board excellent because that ripples

into the culture that you create in the firm. And when you ripple it into the culture that you create in the firm, it takes a life of its own that comes and and in my realm, nobody's really ever had market share until black Rock came along, and still nobody has dominant market share. It's a very diverse industry.

And in that diverse industry, it's a little bit like the analogy of the two guys with the bear in the woods, the guys putting on his tennis shoes, like, I don't have to beat the bear is to beat you. And the fact is you can be in parts of the investment world that are shrinking, and if you're gaining market share, you can still grow at a pretty good rate. And what you have to do is outrun the other guys. You're not worrying about the bear and the This is

the part where they forget that. It's one part of it is you're up against the market, and another part of it is you're up against the fact that you're somehow, some way supposed to be helping a client. And if you can't actually effectuate the helping of the client beyond the returns, the client's going to fire you before they get the returns. It's a little bit like trying to

get them to take unpleasant, bad tasting medicine. They got to take the medicine the full course or the thing's going to come back and get them worse than ever. And if they stop because it's unpleasant, which is the natural human tendency to hurt themselves. I think people are gonna be rewinding that five minutes segment right there and listening to it over and over again, because there's a lot of really really juicy stuff in that. Before I get to some of my favorite questions, I have to ask,

what is really an insane question? You're deeply committed to advancing the world's understanding of redwood forest ecology and are known and this comes right out of your bio. I'm not making this up as one of the world's foremost experts on nineteen century logging. I know you're from the Pacific or now in the Pacific Northwest. How did you ever develop an expertise in that area of interest? That's quite unusual and fascinating to me. You know, again, I'm

kind of a forest gump kind of person. So when I was a kid, I could walk out my parents house hitchhike for twenty minutes in a world where hitchhiking was common, and say and be in uh, second growth redwoods that have been cut over in the nineteenth century, and I would see all this stuff and I wouldn't have a clue what it was, but it fascinated me, you know, reminisc of shacks and old pieces of equipment, and you know, it hadn't all been hauled away, and

I was just I thought it was cool. And so I love the forest, and I decided I wanted to go into forestry. So I went to forestry school. And that's why I went to Humboldt State University, because for forestry. Yeah, because it was okay forestry school. And in the days that I was young, it was in nineteen sixties and the world was in turmoil, and I didn't think I was. I went to school young, and I didn't think I was old enough and mature enough to handle UC Berkeley,

which was a better forestry school. But I'm pretty sure I couldn't handle UC Berkeley. I was mature enough. So I went to Humboldton. It was a nice, quiet place. It was good school, and the teachers treated me while I was, you know, pretty pretty good student in the world of not very good students, said they paid more attention to me. And I liked forestry, and I liked

but but I decided to be a lousy career. I took a summer job for the Forest Service and said I'm never going to work for the government again, under any circumstances, no matter whatever, which also precluded me from ever thinking about a potential world in politics. All of that then led to me having a career in the realm of endeavor, in which I engage by keeping everything about trees and forests as my life long other interests.

And so I came back, and then I started building up the interest living in that same region where those mills were. That's where I moved to, twenty minutes from where I was raised. Will were you raised? San Mateo, California? And I started my firm in Woodside, California, in the Redwoods. And so then I stood side is where a relative to San Francisco, north of It's just northwest of Stanford University. Okay, so your woods not that farther, a little bit further

north on the other side of the bay. But but Humbolt Courses in the Redwoods, Humble State University, where I went to schools in the redwoods. Uh, and so I was, you know, I'm kind of a redwood addict. And uh. But then I started collecting catalogs to figure out what these things were in the woods. And then I get old books, and you know, I started building. I got three thousand volumes of nineteenth century for which I believe it's the largest private collection and force history stuff in

the world. Uh. And then I right on the topic and you know I can. I dug up thirty five mill sites and catalog the artifacts and you know, gave stuff to museums, built my own museum and which is now dismantled, and uh, you know, I've always loved that. But then but then I got into going back and tree science got to a point where suddenly it could be pushed. And it was partly because of technology and

partly because one person. And so I started pushing tree science, uh through this one guy financing it because I had the money and he had the ideas. And we've pushed tree science quite a lot of weeks, and and he and others we keep pushing tree science. I've got major project going on in conjunction with the University of Washington now on uh Pacific Northwest non redwood conifer, and we're

learning things about trees that nobody ever knew before. So you endowed a chair at the Humboldt State University, the Kenneth al Fisher Chair in Redwood forest Ecology. It is the only known chair in the world focused on a single species of tree, because redwood's the coolest tree in the world. It's there, it's the weirdest tree in the world. There. They do so many things that no other tree does. Or that's give me it. For instance, Well, you know what I said was wrong. Lots of trees will do

one of the things that redwoods do. There's no other tree that does all of the things that redwoods do. You know, it's the tallest tree species in the world. Be you cut them down, they don't die right. The roots brown, But it's called compass growth. There's a lot

of hardwoods that will do that, but not the conifers. Uh. They You take a take a second growth redwood that's you know, forty fifty years old, take a thirty ft action out of the middle of it, PLoP it in good soil, and it'll root, sprout, it'll grow tree off of that. There's again it's got all these You put a put a fire m hm in more mature trees, it will not hurt the tree because the bark doesn't have anything in it that's flammable. The bark has no

what you otherwise think of his pitch in it. The function is that why there's no there's less insect damage and that yeah, it naturally produces a complex carbohydrate tannic acid UH. And the tannic acid is bitter to a bug,

and so the bugs don't want it. But it's also it's it plays the function that pitch plays in a pitchy like sticky tree and and in that function UH, the fire then stimulates its desire to cone and it increases to conage rate the next year hugely because it knows that the subordinate trees get burned out in the fire, and it doesn't. It's a space more. Really, it's really fascinating it. It's a weird it's a weird critter. It

almost it seems like it thinks. It doesn't think, of course, but it almost seems like it thinks, and it does so many of these things that know where the tree species does. Let me just say that we recently completed uh studies on its relationship to climate change. It loves brutal climate because just like with the fire, it knows the brutal climate hurts lesser species and let's it then become aggressive. And it's really a very well evolved tree.

You know, it's amazing tree. Yeah. That and what I find fascinating when you're in a place like Murr Woods or any of the other redwood places, photos simply do not do it justice. The only photos that I've ever seen that begin to do with justice are the photos that are people take from the tops of the trees looking down. Because it's a it's a it's a visual it's impossible for a human to get otherwise, it's it's astonishing. And I every time I'm there, I just you walk

out of those sort of woods and mind blown. It's it's and you look at on the phone what you look on the camera. But but if photos are just don't work. If you go to the National Geographic Channel and you see the stuff from Steve Sillett climbing the Redwoods, so Steve's got the kennethal Fisher uh chair and the forcedechnology and uh at humblet and that stuff get you know, anybody on the can you wait long enough and they'll that stuff will roll around and you can get a

pretty good visual at Redwoods in somebody's TV. Al Right, that sounds fastering. Let's let's go to some of my favorite questions in the last twenty minutes that we have. Um, your dad obviously a significant influence, mentor whatever word we want to use. Who else we were mentors to you in your career? In my career, I didn't really have a lot of career mentors per se. There's a guy named Tony Spear who's now deceased, who was the head of investments at an operation called the Bank at California

that doesn't exist anymore. Uh. And he was a student of my father's at Stanford and then. Uh. He was a pretty good mentor to me for a long time. Very nice guy. Also a little bit of an unusual guy. But I didn't have a lot of professional mentors. I have a lot of people that impacted me in life, but not so many professional mentors. Give us an example, Um, you know when I was I mean, my grandfather was very important to me when I was a child. Uh.

My grandfather actually was friends with Saxon Pope. Um. Coming back to our prior discussion, and your grandfather was not Irving Fisher and old. A number of people have said, oh, you're speaking to no, no, no, no, that is this. That was not As my grandfather was a doctor, and he was actually an amazing doctor at UH private practice and UC MED in San Francisco. Again, I'm a fourth

generation San Francisco who moved away from San Francisco. Uh. And so he, going back to our prior discussion in the earlier segment, he knew Saxon Poe because they were using med together. Um. And uh, that's part of how I got interested in that. My grandfather had a big impact on me. Uh. He was a marvelous man in his own way. So I had after he died, I had a kind of a substitute grandfather who was a tree guy, and he had a big impact on me.

And I've been impacted by it. I mean at these serendipitous moments with people like I. I spent a bunch of time with Richard Nixon and just a serendipitous thing. And he just taught me so much and not not very long, and he was such a marvelous guy that almost no one wants to believe was marvelous because by that point in time, he's older and he doesn't really care about politics anymore, and he's got all the rough

edges worn off of him. And this was in California, and uh, and you know, again, I've been blessed to be able to meet people. So you know, I didn't know John Templeton well, but I met John Templeton a number of times, and you know, he had such a

huge impact on me. Um And so then I read everything, you know that I could get my hands on it with John Templeton, and but I didn't actually have the active mentor function because I'm pretty much of an extreme introvert, and I'm not much of a people guy, and so you know that mentor thing didn't work really well for me. So let me ask a different question, a related question.

What investors influenced your approach to invest in Templeton? Templeton of course, my father, of course, Graham, of course, Buffet, of course, Dean LeBaron, Uh, Dreaming, Um, you know, I you know, Dreaming wrote for Forbes and still occasionally gets a column in Uh. And Dreaming wrote for a long time huge value guy, huge low pe guy in particular. Uh. And of course, you know le Baron was really kind

of the original quant guy. I'm not a quant guy per se, but I appreciate the power of quantification and mathematics. And I mean there's a place for numbers and there's a place for non numbers, and um, that's pretty much it. I mean, that's that's a good list, to say the least. And we went over your books. Um, let's talk about the industry itself. What's changed that you think is significant for the better or worse since you joined the finance industry?

Complexity has changed a lot, meaning it's gotten more complex, much more complex. I mean, you know when when I was a kid. You become an investment advisor, and it was extreme generalist. Again, that's the world, as I said in an earlier segment, where you know, we are now creating more MBA's per year than all the NBA's that have been created cumulaily up to that point in time. Technology has become a level playing field for people. So once upon a time, big firms had made frame computers

and little firms had pens and pencils. Today everybody's got technology and and it's leveled a lot of playing field for good and for bad. I mean a lot of these things are dual ate swords. Uh, so many more securities. If you go back to the original Forbes Mutual fund survey once upon a time, Uh, it was thought of as a leading edge thing then, and it had a few hundred mutual funds because a few hundred because that's all you needed in those days. I mean, that's when

you say needed, that's what there was. You covered pretty much the whole universe, and that was a leading edge thing. Then. Uh. If you look at the complexity of things like uh, I mean, Nathan most creates the first et F the spider, and you know if I remember, right, that's the early nineteen nineties. Then you know, then you get the Triple Q, and then now we've got E. T. F. Settle, you know, hundreds almost exactly, and so the complexities increased. The other

part that's changed hugely has been journalism. And you know, journalism when I was young was a few TV channels, a few important magazines, a morning and evening newspaper at your home in the Wall Street Journal, and that's what it was. Uh. You know, there were specialty rags for industries that came out once a month, and you know that that was what it was. Today, everything's moving over the night lightning speed. Uh. Journalists heads turn very fast.

That turnover in the industry is much faster. There's so much noise. I think that's a dual edge short it works for good and for bad. For good, you can use it because you can see what people are focused on and focused on something else. For bad, it's easily easy to be overtaken by the noise. And so you know, you take both of these features and it's just a matter of learning to how to cope with it successfully. And if you can do that right, it actually is

to your advantage. Things that I mentioned earlier, like quantifying sentiment, can be done today in ways that once upon a time they couldn't be done, because the technology allows you to. I remember when I was young and was first working on the price sales ratio, which, by the way, Jim O. Shaughnessy gives you credit for essentially creating that ratio. No one else had had done that previously. You will find no literature on the price sales ratio. Until I started

writing on the price sales ratio. You will find none. Uh. That is Graham made a reference uh in The Intelligent Investor to the fact that it might be interesting. And other than that, nobody else really there's there's there's nobody ever worked on it until I started writing about it. And I, you know, I think it's a it's a one useful tool. It's not, you know, kind of be all in end all. I don't believe in be all be all in end alls, but be that as it may. Um And now I lost my train of thought as

to how I got into the price sales race. But it doesn't matter. It's fascinating that, you know, until I started researching background on you for this conversation, I had no idea that that was a can fisher. Now I remember why I was because in the in the seventies when I was working on that, I paid Goldman Sacks dollars to do a one time screen of the New York Stock Exchange for me because they had mainframe computer. Uh. That's back was real money, low price sales ratio stocks.

And in that point in time, low price sales ratio by itself, because you couldn't get it was something that provided value added by itself because you could look do that, find companies that had very low price sales ratios which you knew fundamental issued to have their earnings come back, and they were just flat on their face, and you could figure out that the market was too afraid of this stock. And and that was a useful tool in today.

So you think it's less useful. It's got value, but not as much, not as much as it had in those days because because what you're trying to get as information other people don't have. But my point is the world was more primitive then, and so what's gotten what's happened is we got more complexity, we got more tools, we got more noise. Uh. And then of course the other thing that we have with that we have more We have more global custodial reach than we ever had before,

and so we have more global nous. And if you go back to the world, Templeton's the only guy that was doing any kind of global nous in those days, and he's going way out of his way because it's hard to do. Today, it's easy to be global. And our last question that telling me we have to wrap you apparently have other places to go and be, is what do you know today about investing that you wish

you knew forty years ago when you began. I wish I understood then that we were going to go through a process some of the pieces of which we've been talking about that takes the Warren Buffet line that in the long term, the market's a weighing machine and in the short term it's a voting machine, and stalls off the weighing and makes the voting process longer. Sentiment has become, in my opinion, more important and more enduring, not permanently enduring.

Weighing still is the ultimate outcome finally, but it takes longer to get there because I believe views of our society can be maintained wronger, longer, longer, longer before they get to the point where they get overturned by the weighing. I mean, the weighing is about fundamental valuation relative to real quality and real growth, and the voting is about sentiment. And here's what we think is true. And we now can think things that are just total nonsense for a long, long,

long time and fail to actually see them. And I wish that. And I think that comes from technology, which ripples over into all parts of our lives. And I wish i'd seen that impact between Twitter and the blog is fhere and everything else. Would it would have made me better at seeing markets? And I've been if I could have figured that. I wish I knew that. You asked a question, what one big thing? Would? I wish I would have known earlier. That's it, Ken, this has

been absolutely fascinating. Thank you so much for being so generous with your time. We'll have to have you back and do another three hour stints. I'd love to okay your next trip to New York. Put sign me up. Uh So, if people want to find any of his Ken Fisher's writings, you can go to Fisher Investments dot Com Forbes on the Fisher side. I'll put up a link to all his favorite books. Um, if you just google me, you don't find they'll find more nonsense than

they ever wanted. Okay, be sure and check out all our other interviews. Just look up an inch er down an inch on Apple iTunes and you'll see our other seven or so interviews. I want to thank Mike Batnick, he is my head of research, and Charlie Vollmer, who is both my producer and engineer. I'm Barry Ridholts. You've been listening to Masters in Business on Bloomberg Radio. Masters in Business is brought to you by ex On Mobile Energy lives here.