Common Stocks and Uncommon Profits- Philip A. Fisher
I read this illuminating book on stocks in the bookstore and decided to buy it to continue reading. Published in 1958, it was republished in the 21st Century as it is still relevant today as it was then.
The book is read by investors like Warren Buffett who adds his praise for the book and the person on the back cover of this book.
Amongst the golden nuggets in the book is the chapter on 'What to Buy' which lists 15 points that an investor should look out for when considering a stock to buy. It goes on to elaborate on what each point refers to and how an investor can investigate and find the information to flesh out the full picture of a company and its prospects. Point 1-Does the company have products or services with sufficient market potential to make possible a sizeable increase in sales for at least several years? -when elaborating on this point, he makes the distinction between two groups of companies with spectacular growth. One group is 'fortunate and able' while the other is 'fortunate because they are able'. This was before "Built to Last" was written and he has established the basis to differentiate outstanding companies with the potential for continued cash-flows.
In the chapter about '5 Don'ts for Investors', the one that strikes a chord with me is the fifth one which is 'Don't quibble over eighths and quarters'. This basically says to buy at the sell price which is the higher price and to sell at the buy price and not fuss over the price differences. He gave real examples of customers who wanted to buy a price at the previous day's closing price and refusing to bulge and raise the price. The investor lost the potential to multiply his earnings by 930 times. I personally experienced this type of heartache of trying to sell for a few cents higher and missing out on getting higher returns for my stocks.
The book is filled with insights of a professional who started his investment firm right smack in the middle of the Great Depression in 1931 and managed to last and make an impact on investing and the methodology behind it.
Warren Buffett said of his ideas in the book, 'A thorough understanding of the business, obtained by using Phil's techniques...enables one to make intelligent investment commitments.'
Buy it. Loan it. Borrow it.
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