How Ken Fisher Chooses Stocks
Ken Fisher outlines his stock selection process, which involves identifying stock types likely to perform well, filtering out non-conforming companies, and evaluating fundamental business strengths like market share and cost efficiency. He emphasizes that investors should develop a consistent personal process aligned with their temperament to avoid panic-driven mistakes during market volatility.
Summary
Ken Fisher describes a multi-stage stock selection methodology that begins with top-down category analysis. First, he identifies which types of stocks should perform well in current conditions, while also considering alternative stock types that might outperform if his primary thesis doesn't materialize. Once he has determined the promising stock categories, he filters out companies that don't fit the profile—what he calls 'oddballs'—ensuring candidates actually possess the fundamental business characteristics of their category. Within the remaining universe, Fisher looks for companies with structural competitive advantages: high relative market share and low-cost production capabilities. These are the basic competitive advantages that enable management to incrementally outperform rivals over time. He then assesses whether these advantages are already reflected in current market pricing and, critically, whether management actually understands that these advantages are what should drive their strategy. Fisher acknowledges that his process is complex and may not suit everyone. Instead, he advocates for investors developing their own consistent, personal stock selection methodology that aligns with their individual temperament and risk tolerance. This alignment is crucial because stock market volatility is inevitable, and when temporary losses occur, an investor comfortable with their process won't panic and make destructive decisions they know to be wrong.
Key Insights
- Fisher starts stock selection by identifying which stock types should perform well now, while simultaneously considering alternative stock types that might outperform if the primary thesis fails
- Fisher filters for companies with high relative market share and low-cost production as fundamental competitive advantages that enable incremental outperformance versus competitors
- Fisher evaluates whether a company's competitive advantages are already broadly recognized and priced into the market valuation
- Fisher assesses whether management truly understands that structural advantages like market share and cost efficiency should be their strategic focus
- An investor's stock selection process must align with their personal temperament so that market volatility and temporary losses don't trigger panic-driven decisions they know are mistakes
Topics
Transcript
[0:00] Do you have a recommended stock selection process? Well, let me say that differently. I got a way I go about doing things. What I'm trying to do almost always is think through first what are the types of stocks that should do well now and some of the kinds that I think would do well if the ones that I think will do well don't. Then once I've got those types figured, I look at the stocks within the types and I want to be sure that I don't have any oddballs. So I [0:32] throw out oddballs, ones that don't look and act and have the fundamental business of the type. So in that then I look…
Full transcript available for MurmurCast members
Sign Up to AccessMore from Fisher Investments
This Week in Review | Fed Rate Hike, Tech Volatility & AI Risks, Bond Yields (Sept. 18, 2026)
This Week in Review covers three major market developments: the Federal Reserve's first rate hike since 2023 (25 basis points to 3.75-4%), tech sector volatility driven by AI safety concerns, and rising bond yields globally reaching levels unseen in decades. The hosts emphasize that these moves were largely expected, offer historical context for current yields, and remind investors to focus on broader fundamentals rather than short-term market swings.
Will Stocks Finish Strong in 2026?
Ken Fisher explains the 'Midterm Miracle' phenomenon, which shows that the fourth quarter of a president's second-term midterm election year and the subsequent two quarters historically represent the most consistently profitable nine-month period for stock markets. He expects strong market performance through the end of 2026 and into early 2027 based on this historical pattern.
Ken Fisher: Has This Bull Market Run Too Far, Too Fast?
Ken Fisher argues that the current bull market's 20% average return since October 2022 is not excessive relative to historical bull market performance. He contends that the concern about the market rising "too far, too fast" is a misguided perspective, since bull markets historically average 23% annual returns and this current market is performing in line with long-term bull market norms.
Ken Fisher on Market Crashes, US Debt, Construction and More
Ken Fisher addresses investor questions about market crashes, government debt, construction indicators, and risk management. He argues that there's insufficient evidence to determine whether crashes are less likely today, that debt-to-GDP ratios tell us nothing meaningful, and that construction trends are not particularly important economic indicators.
3 Things You Need to Know This Week | Fed Decision, US Retail Sales, Medicare (Sept. 14, 2026)
This episode covers three key financial topics: the upcoming Federal Reserve rate decision expected to be a 25 basis point hike, August retail sales data release that shouldn't be over-interpreted due to monthly volatility, and the Medicare annual enrollment period opening October 15th through December 7th.