process
Scuttlebutt
The rule
The best facts about a business rarely come from its own shiny reports. They come from talking to its customers, suppliers, rivals, and staff.
Where it flips
Scuttlebutt can mislead when the sample is tiny or one-sided. A few chatty customers are not the whole market. Small stories can feel like proof while pointing exactly the wrong way.
Fisher called this ground-level digging 'scuttlebutt'. You ask the people around a business what they really think: customers who use the product, suppliers who are paid by it, rivals who fear or laugh at it. His point is that first-hand sources beat second-hand tips and headlines. A careful beginner can learn a lot just by looking at where the real data lives (module 037) instead of repeating what a broker says. This turns research into first-hand curiosity: read the exchange filings, the quote page, and the actual product, rather than collecting opinions.
A worked example
Before trusting a hot tip on a shop chain, an investor visits the stores, asks the shopkeepers how sales are moving, and reads the company's own NSE filings. He learns more than any WhatsApp forward could tell him. [illustrative]
How to spot it
- ·you prefer first-hand sources over forwarded tips
- ·you look at the product and filings yourself
- ·you trace opinions back to who actually knows
Philip Fisher · Common Stocks and Uncommon Profits