Best way to give back? Create jobs, says billionaire
Best way to give back? Create jobs, says billionaire
Kenneth Fisher has also willed 80% of his estate to Johns Hopkins for medical research, rather than set up a trust
By Lorna Tan, Finance Correspondent
-- ST PHOTO: SHAHRIYA YAHAYA
HE HAD racked up a personal fortune of US$10 million (S$14.96 million) by the time he was 38, so it is no exaggeration to say that Kenneth Fisher knows a thing or two about making money.
The 56-year-old founder and chief executive of money management firm Fisher Investments has used those skills to build a huge business and propel himself into the ranks of America's super-rich.
Last week, he was ranked 271 on the Forbes 400 list of America's richest, with a net worth of US$1.8 billion.
Not bad for someone who had set his sights on a career in forestry - about as far removed from the jungle of high finance as you can get.
Although his father Philip Fisher owned an investment advisory firm, Mr Fisher did not initially aspire to follow in dad's footsteps.
He wanted to pursue his love for the woods and studied forestry at California's Humboldt State University. As fate would have it, a summer job in the forestry services industry changed his mind about his intended career path.
Coming out of the woods
Who he is
Mr Kenneth Fisher, the founder and chief executive of money management firm Fisher Investments, had originally set his sights on a career in forestry.
... more
'I like the forest but it's a poor career, and I would never work for the government because it is too stifling,' said Mr Fisher, who was in Singapore earlier this month for the Forbes Global CEO Conference.
He graduated in 1972 with a degree in economics and worked for his father's company before starting his own, California-based Fisher Investments, in 1979. The company now manages US$42 billion for private clients and institutions.
Mr Fisher has also written four investing books: Super Stocks, The Wall Street Waltz, 100 Minds That Made The Market and The Only Three Questions That Count. The fourth book touches on investor behaviour, and challenges investors to debunk conventional market myths and to 'invest by knowing what others don't'.
'It's what they know that others don't know that forms the basis for what they should do and the bets they take,' he said.
For passive investors who do not want to spend time or energy learning the ins and outs of bonds and stocks, he advises putting money into index funds.
'If you don't want to learn how to beat the market, own it,' he said.
'Put about 45 per cent in the S&P 400 Index (which covers the United States market), another 45 per cent in the MSCI EAFE Index (which covers 20 non-US developed countries) and 10 per cent in the MSCI Emerging Markets Index.'
Mr Fisher lives in Woodside, California, with his wife, Sherrilyn, 56. They have three grown sons.
Q How old were you when you started your own company?
A I was 23, too young to know I was too young to do it, so I could do it. If I had known I was too young, I wouldn't have done it. If you think you can't do it, you can't.
In the beginning, I sold research and research services to investment companies in the San Francisco area. My company was just me, and I was contracted to compile literature on a specific subject and sometimes provide financial analysis.
Internet didn't exist then and, in those days, investment companies wanted everything on a certain subject researched and summarised from information gathered from good business libraries.
Over time, I moved towards selling ideas about stocks, and people paid a quarterly retainer for ideas I came up with. In the mid-1970s, I started managing people's money and decided that was what I wanted to do.
Q What do you do with your wealth? Do you believe in giving back to society?
A Most philanthropy is water down the drain... Philanthropy is good, but I don't believe in it unless you know how to do it well.
In my lifetime, I believe it's better to keep the money in the company, and to grow and provide employment opportunities. Fisher employs 1,000 staff.
I don't believe in setting up family trusts or foundations because my sons or grandchildren might have ideals different from mine.
What I've done is to will 80 per cent of my estate to Johns Hopkins Medicine in Baltimore, where they can figure out how to use my money for good medical research. In a sense, I really work for Johns Hopkins. That makes it easy for me and I don't have to worry about people sucking up to my grandkids, as I would have if I had set up a foundation.
Q What financial planning have you done for yourself?
A None. I took a chance on building my business, which has paid off, and hence financial planning becomes superfluous. The only thing that really matters is running the company well and estate planning.
Q What's your investment philosophy?
A Global, opportunistic, top-down, thematic, sector and country rotation.
Q Any other investments?
A I own a lot of real estate - 300,000 sq ft of office space - that my company uses. For tax and estate planning purposes, I own it and lease the office space to the company. Forbes' valuation of my office space, which is mostly in California, is US$100 million. The remaining properties are in Washington, London and outside Frankfurt in Germany.
Q Moneywise, what were your growing-up years like?
A My family wasn't wealthy when I was young. But by the time I grew up, my father had become wealthy from running his investment business.
I was very frugal, a saver. I did yard work, washed dishes, made deliveries, and saved the income. In college, I did demolition and construction work, and saved the money. My father and mother were both pretty frugal, and that rubbed off on me.
Q How did you get interested in investing and become a money manager?
A My father was in the investment business and when I left college with a degree in economics, before going to graduate school, he said I could come work for him, try it, and if I didn't like it, go back to graduate school.
I worked for him for a year only, because I concluded it wasn't good to work in a father-son mode. But I did like the investing business and went out on my own immediately.
Q Tips to retail investors?
A Be sceptical, question everything, assume most conventional wisdom is mythology and false, and read my new New York Times bestseller, The Only Three Questions That Count. It teaches you to think about investing like a science.
Q What has been a bad investment?
A The first stock I ever bought was in a Florida real estate developer named Killearn Properties in 1971. I was 21 years old. It went from US$10 to 25 US cents in about 18 months, and I had no clue the whole time. I put about US$10,000 in and basically lost it all. Great way to start out because if you like it when you lose, then you will always like it, even when you win!
Then, in 1984, I bought about 3 per cent of a company called Charter Co for my clients, which also went bankrupt and I lost it all. I joined the equity committee for the bankruptcy proceedings just to learn from the inside out what had happened so I'd never make that mistake again. It is actually pretty easy to volunteer for bankruptcy committees, for anyone, and it is a great learning experience.
Q Your best investment to date?
A Rather obviously, it was the creation of my company, which I bootstrapped from sweat equity (slave labour, with me as the company's slave). It effectively had a zero cost basis and made me, according to the Forbes 400 and Forbes Global Billionaire lists, one of the world's wealthiest people.
In terms of a single stock, the best investment was buying into American steelmaker Nucor in 1976. The stock went up more than 100-fold. I led in a client group that bought 1 per cent of the company. It was so long ago, I don't remember the dollars.
Q What are your thoughts on sub-prime mortgage woes?
A They're small in scale and measurably not spreading into a problem. I expect to see the resumption of a bull market by Halloween.
Q And your home now is...?
A A 2,000 sq ft apartment over my company's headquarters. I can get to work in about two minutes.
Q And your car is...
A A red Volvo four-door sedan.
Kenneth Fisher has also willed 80% of his estate to Johns Hopkins for medical research, rather than set up a trust
By Lorna Tan, Finance Correspondent
-- ST PHOTO: SHAHRIYA YAHAYA
HE HAD racked up a personal fortune of US$10 million (S$14.96 million) by the time he was 38, so it is no exaggeration to say that Kenneth Fisher knows a thing or two about making money.
The 56-year-old founder and chief executive of money management firm Fisher Investments has used those skills to build a huge business and propel himself into the ranks of America's super-rich.
Last week, he was ranked 271 on the Forbes 400 list of America's richest, with a net worth of US$1.8 billion.
Not bad for someone who had set his sights on a career in forestry - about as far removed from the jungle of high finance as you can get.
Although his father Philip Fisher owned an investment advisory firm, Mr Fisher did not initially aspire to follow in dad's footsteps.
He wanted to pursue his love for the woods and studied forestry at California's Humboldt State University. As fate would have it, a summer job in the forestry services industry changed his mind about his intended career path.
Coming out of the woods
Who he is
Mr Kenneth Fisher, the founder and chief executive of money management firm Fisher Investments, had originally set his sights on a career in forestry.
... more
'I like the forest but it's a poor career, and I would never work for the government because it is too stifling,' said Mr Fisher, who was in Singapore earlier this month for the Forbes Global CEO Conference.
He graduated in 1972 with a degree in economics and worked for his father's company before starting his own, California-based Fisher Investments, in 1979. The company now manages US$42 billion for private clients and institutions.
Mr Fisher has also written four investing books: Super Stocks, The Wall Street Waltz, 100 Minds That Made The Market and The Only Three Questions That Count. The fourth book touches on investor behaviour, and challenges investors to debunk conventional market myths and to 'invest by knowing what others don't'.
'It's what they know that others don't know that forms the basis for what they should do and the bets they take,' he said.
For passive investors who do not want to spend time or energy learning the ins and outs of bonds and stocks, he advises putting money into index funds.
'If you don't want to learn how to beat the market, own it,' he said.
'Put about 45 per cent in the S&P 400 Index (which covers the United States market), another 45 per cent in the MSCI EAFE Index (which covers 20 non-US developed countries) and 10 per cent in the MSCI Emerging Markets Index.'
Mr Fisher lives in Woodside, California, with his wife, Sherrilyn, 56. They have three grown sons.
Q How old were you when you started your own company?
A I was 23, too young to know I was too young to do it, so I could do it. If I had known I was too young, I wouldn't have done it. If you think you can't do it, you can't.
In the beginning, I sold research and research services to investment companies in the San Francisco area. My company was just me, and I was contracted to compile literature on a specific subject and sometimes provide financial analysis.
Internet didn't exist then and, in those days, investment companies wanted everything on a certain subject researched and summarised from information gathered from good business libraries.
Over time, I moved towards selling ideas about stocks, and people paid a quarterly retainer for ideas I came up with. In the mid-1970s, I started managing people's money and decided that was what I wanted to do.
Q What do you do with your wealth? Do you believe in giving back to society?
A Most philanthropy is water down the drain... Philanthropy is good, but I don't believe in it unless you know how to do it well.
In my lifetime, I believe it's better to keep the money in the company, and to grow and provide employment opportunities. Fisher employs 1,000 staff.
I don't believe in setting up family trusts or foundations because my sons or grandchildren might have ideals different from mine.
What I've done is to will 80 per cent of my estate to Johns Hopkins Medicine in Baltimore, where they can figure out how to use my money for good medical research. In a sense, I really work for Johns Hopkins. That makes it easy for me and I don't have to worry about people sucking up to my grandkids, as I would have if I had set up a foundation.
Q What financial planning have you done for yourself?
A None. I took a chance on building my business, which has paid off, and hence financial planning becomes superfluous. The only thing that really matters is running the company well and estate planning.
Q What's your investment philosophy?
A Global, opportunistic, top-down, thematic, sector and country rotation.
Q Any other investments?
A I own a lot of real estate - 300,000 sq ft of office space - that my company uses. For tax and estate planning purposes, I own it and lease the office space to the company. Forbes' valuation of my office space, which is mostly in California, is US$100 million. The remaining properties are in Washington, London and outside Frankfurt in Germany.
Q Moneywise, what were your growing-up years like?
A My family wasn't wealthy when I was young. But by the time I grew up, my father had become wealthy from running his investment business.
I was very frugal, a saver. I did yard work, washed dishes, made deliveries, and saved the income. In college, I did demolition and construction work, and saved the money. My father and mother were both pretty frugal, and that rubbed off on me.
Q How did you get interested in investing and become a money manager?
A My father was in the investment business and when I left college with a degree in economics, before going to graduate school, he said I could come work for him, try it, and if I didn't like it, go back to graduate school.
I worked for him for a year only, because I concluded it wasn't good to work in a father-son mode. But I did like the investing business and went out on my own immediately.
Q Tips to retail investors?
A Be sceptical, question everything, assume most conventional wisdom is mythology and false, and read my new New York Times bestseller, The Only Three Questions That Count. It teaches you to think about investing like a science.
Q What has been a bad investment?
A The first stock I ever bought was in a Florida real estate developer named Killearn Properties in 1971. I was 21 years old. It went from US$10 to 25 US cents in about 18 months, and I had no clue the whole time. I put about US$10,000 in and basically lost it all. Great way to start out because if you like it when you lose, then you will always like it, even when you win!
Then, in 1984, I bought about 3 per cent of a company called Charter Co for my clients, which also went bankrupt and I lost it all. I joined the equity committee for the bankruptcy proceedings just to learn from the inside out what had happened so I'd never make that mistake again. It is actually pretty easy to volunteer for bankruptcy committees, for anyone, and it is a great learning experience.
Q Your best investment to date?
A Rather obviously, it was the creation of my company, which I bootstrapped from sweat equity (slave labour, with me as the company's slave). It effectively had a zero cost basis and made me, according to the Forbes 400 and Forbes Global Billionaire lists, one of the world's wealthiest people.
In terms of a single stock, the best investment was buying into American steelmaker Nucor in 1976. The stock went up more than 100-fold. I led in a client group that bought 1 per cent of the company. It was so long ago, I don't remember the dollars.
Q What are your thoughts on sub-prime mortgage woes?
A They're small in scale and measurably not spreading into a problem. I expect to see the resumption of a bull market by Halloween.
Q And your home now is...?
A A 2,000 sq ft apartment over my company's headquarters. I can get to work in about two minutes.
Q And your car is...
A A red Volvo four-door sedan.
posted by Alex at
2:20 AM
0 Comments:
Post a Comment
<< Home