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Ken Fisher is best known for his regular Forbes "Portfolio Strategy" column, where made his stock selection calls in more than 20 years. He is the Chairman and CEO of Fisher Investments, an asset management firm that has more than $20 billion asset under management. Fisher Investments' marketing advertisement made the firm and Fisher himself well known. Ken Fisher developed a tool known as the Price-to-Sales ratio, which is now part of the core financial curriculum.

Fisher is also the lead manager of mutual fund Purisima Total Return (PURIX) that has about 15 year history. The fund invests in a portfolio allocated between domestic and foreign common stocks and other equity-like securities such as preferred stock, convertible securities, warrants, rights and depositary receipts. The fund's investments in different types of securities may vary significantly.

The following table shows the fund's holdings' characteristics:

Averages

PURIX

Category Avg

Price/Earnings 14.71 13.04
Price/Book 2.49 1.70
Price/Sales 1.72 1.32
Price/Cashflow 6.45 6.11
Long term earnings % 11.38 9.75
Sales Growth -5.4% -39.25%
Book Value Growth 0.94% -12.54%

From the above table, it is not exactly clear whether this fits into Fisher's low price to sale stock selection criterion. However, one can that the stocks it holds have higher long term earnings, better sales growth and book value growth.

The following shows the top 8 stocks the fund currently holds:

Company

Symbol

% Assets

Siemens ADR SI 2.91
Occidental Petroleum Corporation OXY 2.88
Freeport-Mcmoran Copper & Gold Cl A FCX 2.85
Caterpillar CAT 2.67
Anadarko Petroleum Corporation APC 2.60
BASF SE ADR OTCQX:BASFY 2.51
Schlumberger SLB 2.44
Oracle ORCL 2.4

One can see Fisher favors oil, metal mining and technology companies.

Since 1998, PURIX has achieved 5.39% annualized return. The fund was hit hard during the financial crisis, losing 42.9% in 2008. The following compares PURIX's performance with a diversified dividend paying ETF portfolios that use stock and REIT ETFs.

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
PURIX 31% 107% 3% -5% 3% 6%
Retirement Income ETFs Strategic Asset Allocation Risk Profile 0 19% 180% 8% 23% 6% 20%
Retirement Income ETFs Tactical Asset Allocation Risk Profile 0 19% 158% 17% 91% 16% 77%

click to enlarge


In conclusion, stock investors can look at some of Fisher's top holdings as a starting point to construct their stock portfolios. This should be only as an equity portion in one's portfolios.

Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

Disclosure: Author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 8 Stock Picks From Ken Fisher