Tuesday, September 09, 2008

Stockerblog.com Exclusive: Interview with Ken Fisher – Part 8 – Final Segment

Stress and Investing

Stockerblog.com had the pleasure of recently interviewing Ken Fisher, head of the $45 billion Fisher Asset Management, a very long time Forbes columnist, and author of the books Super Stocks, The Wall Street Waltz, 100 Minds That Made the Market, and The Only Three Questions That Count: Investing by Knowing What Others Don't.

He is also coming out with a new book in the Fall, The Ten Roads to Riches: The Way the Wealthy Got There (And How You Can Too!), published by Wiley.

This is the final segment of the interview. If you missed any of the earlier segments of the interview, you can check them out at: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, and Part 7.

Stockerblog.com: I have one other question. I'm assuming that from time to time when you do make mistakes, when you invest in a sector that goes against you, it creates stress. Is there anything that you do to deal with stress?

Fisher: No, not particularly, but I don't think I feel stress as much as most people do. First, I've been at this a long time. Secondly, I've got myself, as I mentioned earlier, real conditioned to the notion that I'm going to make a lot of mistakes, so no particular mistake seems like a big deal to me. I think I've always been lucky that I don't seem to feel stress as much as most people feel stress. But I don't have some special stress reduction technique. There's not like I go in the corner and breathe a certain way or do a certain exercise or go running. I don't particularly do something about stress.

Stockerblog.com: That's kind of interesting that you're conditioned to know that you are going to make mistakes. If you are aware of that ahead of time, I'm sure that can help.

Fisher: But, you know, if I were in a different field, like let's say ice skating, if you're a competitive ice skater, you just can't make any kind of mistake anybody can see, because it just comes right out of your points. If you made one of those mistakes that you see on one of these ice skaters that go and do one of these flippy flip things, they go flying through the air, they come down and go splat, you feel really sorry for them. They are out there really trying and they go splat in front of everybody. The world that I come from, is one where it's more like every time you go out to do the ice skating, a pretty good chunk of everything you do is mistakes. So you've got to get used to it.

Therefore the next mistake is just one more in the process, and so you don't beat yourself up for it too much; you know, you think about somebody like, I'm making this up out of thin air, some musical performers, and they get up in front of the crowd at Carnegie Hall, there in the middle of their performance, and twenty percent of the time, they hit the wrong notes. People wouldn't relate to that very well. I'm in a world where it you hit the wrong notes twenty percent of the time, in the long term, you're thought of as one of the greatest performers ever. So hitting a few wrong notes means nothing.

Stockerblog.com: So as long as you are right roughly two thirds of the time, you're probably in good shape.

Fisher: Yeah, but think of what that means if you are playing music by contrast. I think that most people think like the world of the musician or the ice skater, so when they make a mistake, it's nothing but a terrible catastrophe that leads to being stressed, and they haven't quite gotten themselves to this notion that you're actually going to make less mistakes if you stop worrying about making mistakes.

Another way that I remember that, when I was a boy, it was almost a part of the United States Constitution that boys had to play baseball. So I played baseball. Now I wasn't that good of a baseball player but I played baseball. One of the things that I noted about myself is, when the ball was coming at me and I went to catch it, the more afraid I was, the worse I was at catching it. The less afraid I was, the easier I caught it. The more afraid you are, where you're at the point where your hands start to tremble, it's a lot harder to catch it.

I think you actually do better when you have less stress than when you have more stress. So probably for some people, that attempt to consciously reduce stress is probably a good idea. If you can just get there naturally, it's probably better. It's kind of hard to envision that great baseball players are feeling a lot of stress when the baseball is coming at them.

Stockerblog.com: You've answered all my questions. I really appreciate your time on this. Thanks again.

End of the eighth and final installment of the Interview.

Fisher obviously didn't provide any stock recommendations for the interview, but many of the stocks he has favored in the past can be found in his previous Forbes columns. For example, Royal Dutch Shell plc (RDS-A) (RDS-B), Intel (INTC), Ball Corp. (BLL), and ENI (E).

His book, The Only Three Questions That Count: Investing by Knowing What Others Don't, which would make a great gift for any investor, is available at Amazon.

Author does not own any of the above mentioned stocks.

Interview by Fred Fuld at Stockerblog.com

Copyright 2008 Stockerblog.com, All rights reserved. Reprinting without permission is prohibited.

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Super Hero said...
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