Masters in Business

Ken Fisher on Stocks and Valuations

The market is in its "usual unique" position.

This week on our Masters in Business radio podcast, we sit down for the second time with Ken Fisher of Fisher Asset Management LLC, which oversees about $80 billion in assets.

The last time we had Fisher on as a guest, we discussed markets and investing. This time, we delve deeper into how he built his firm. Leaving this out last time was an oversight on my part; I simply missed a giant swath of history that professional investors might like to hear.

Fisher also said the stock market is in its “usual unique” position. Fisher, a top down analyst of the market -- he focuses on geographies and sectors first, getting to individual companies last -- tells us that price-earnings ratios have never been predictive, and that stocks are less expensive than many people believe. And he believes behavioral issues are much more important than valuations.

He also explained that stock picking has always been challenging, but it’s only recently that the analytics to prove it became available. He referred to Jack Bogle’s 1961 paper that explained why the cost structure of active management was destined to lose against a low-cost index. It took decades before that reality became both understood and well known.

All of the many books Fisher discusses can be found here.

You can hear the show on Bloomberg Radio, or stream/download the full show, including the podcast extras, on iTunesSoundCloud and on Bloomberg. All of our earlier podcasts can be found on iTunesSoundcloud, and Bloomberg.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Barry Ritholtz at britholtz3@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE