Super Stocks [Paperback]

Kenneth Fisher (Author)

Book Description

Publication Date: September 21, 2007 | ISBN-10: 0071499814 | ISBN-13: 978-0071499811 | Edition: 1

Target the Super Stocks that deliver huge returns

One of the most successful investing books ever published, Super Stocks showed investors how to use innovative techniques and fundamental analysis for valuing stocks and predicting future profit margins.

You'll gain valuable insight into Fisher's original thinkin for valuing stocks and predicting future profit margins. A pioneer in the use of the Price Sales Ratio-a powerful analytical tool-Fisher regales readers with instructive tales of the businesses he invested in and profited from.

Super Stocks gives a historical perspective on how Fisher successfully researched companies and stocks—who he saw and what he asked—to get a better read on profitable returns.

“As rich in investment war stories as it is in knowledge.”-The Motley Fool

Editorial Reviews

From the Author

The son of author Philip Fisher (Common Stocks & Uncommon Profits), rebel Ken had to make his own way in the investment world. Super Stocks is the product of his unique take on investing in the stock market. Eschewing a good deal of his father's no-numbers approach, Ken popularized the use of the price/sales ratio (PSR) and price/research ratio (PRR) in this 1984 classic that earned him a permanent spot as a columnist in Forbes. Although Fisher hardly invented the price/sales ratio, his emphasis of it is unmatched in investment history, save perhaps Ernie Kiehne, formerly of Legg Mason's Value Fund.

Fisher's Super Stocks is an idiosyncratic romp through the technology heyday of the early '80s. Fisher tells story after story of how high-fliers hit a short-term flame-out he called the "glitch" and the price/sales ratio and price/research ratio got him in at the bottom. Although he only gives quantitative price/sales ratios on technology-related stocks for the 1983 and 1984 time frame, his ability to construct an entire approach to valuation outside of the earnings-preoccupied mainstream still makes for compelling reading. Fisher has not completely escaped his father, though. The guy talks about the businesses he buys in lurid detail, advising investors that to be successful they need to do the same. As rich in investment war stories as it is in knowledge, Super Stocks makes for an excellent read. --This text refers to an out of print or unavailable edition of this title.

About the Author

Kenneth Fisher is the founder, chairman, and CEO of Fisher Investments, an independent global money management firm with more than $30 billion in assets. He pioneered Price Sales Ratios in stock analysis and is the bestselling author of The Only Three Questions That Count.

Product Details

• Paperback: 256 pages
• Publisher: McGraw-Hill; 1 edition (September 21, 2007)
• Language: English
• ISBN-10: 0071499814
• ISBN-13: 978-0071499811
• Product Dimensions: 8.9 x 6.1 x 0.7 inches
• Shipping Weight: 15.2 ounces
• Average Customer Review: 4.2 out of 5 stars  See all reviews (9 customer reviews)
• Amazon Best Sellers Rank: #334,334 in Books (See Top 100 in Books)

More About the Author

Ken Fisher: CEO of Fisher Investments

Ken Fisher is founder, Chairman and CEO of Fisher Investments, an independent money management firm managing tens of billions of dollars for large pension plans, endowments, and foundations globally, as well as thousands of high net worth individuals.

Ken Fisher: Forbes Columnist

Ken Fisher is best known for his over 28 year tenure as Forbes' Portfolio Strategy columnist--the fourth longest running columnist in Forbes 90+ year history. Third-party research firm, CXO Advisory Group's "Guru Grades" ranks Fisher as one of the most accurate stock market forecasters over recent years.*

Ken Fisher: Bestselling Author

Ken Fisher has written eight books on investing and personal finance, four of which were New York Times bestsellers. Recent books include 2011's Markets Never Forget, 2010's Debunkery, 2009's How to Smell a Rat, 2008's The Ten Roads to Riches, and 2006's The Only Three Questions That Count - all published by John Wiley & Sons. Other books include 1984's Super Stocks, 1987's The Wall Street Waltz, and 1993's 100 Minds That Made the Market. Ken Fisher's books have been translated into 9 languages, reaching over 3/4 of global GDP.**

Fisher Investments Press

Ken Fisher's firm, Fisher Investments, embarked on a publishing imprint with John Wiley & Sons in 2007, focusing on investing-related topics. Titles published under the imprint, Fisher Investments Press, so far include 20/20 Money and Own the World and the Fisher Investments On series, which focuses on the 11 primary investing sectorsThe series includes in depth coverage on nine popular financial sectors, and Emerging Markets.

Other Ken Fisher Contributions

Ken Fisher has been published, interviewed and/or been written about in many major American, British, Canadian, German and Swiss finance or business periodicals. Fisher has been on the Forbes 400 list of richest Americans and the Forbes Global Billionaire lists since 2005. Ken Fisher is also on Investment Advisor magazine's prestigious IA-30 list of the 30 most influential people in and around money management over the last 30 years.***


*http://www.cxoadvisory.com/gurus. As of 9/5/2012. Fisher Investments has no affiliation with CXO Advisory Group. Ken Fisher's market forecasts in Forbes represent his personal forecasts of the overall market and are not an indication of the performance of Fisher Investments. Not all forecasts may be accurate as those in the past. Investing in securities involves the risk of loss. Past performance is no guarantee of future results. Investments in foreign securities involves additional risks such as losses related to other currencies and securities markets.

**Based on countries' official languages and GDP reported by the IMF, as of 12/15/2011.

***http://www.advisorone.com/2010/05/01/thirty-for-thirty

Most Helpful Customer Reviews

17 of 17 people found the following review helpful

5.0 out of 5 stars A good book that teaches true, disciplined value investing March 15, 2002

By Tony Ursillo

Format:Paperback

If you've read a few of Fisher's regular columns in Forbes, you know that he 1) is primarily a value-oriented investor, 2) applies numerous, diverse tools in formulating his opinions, and 3) is quite self-confident. I think most people would objectively agree that a combination of all three of these qualities is key to being a successful long-term investor. Super Stocks, which I read a decade ago and still refer to today, effectively captures and displays Fisher's approach. Fisher does an admirable job of describing his investment philosophy, then providing a detailed walk-through of how he implements it - that type of focus is lacking in so many other investment books. Beyond that, Super Stocks introduced me to several investment resources that I was not aware of and Fisher even closes the loop by providing advice on selling out of winners. Two primary concepts that have stuck with me over the years and still weigh heavily on my thinking today are the idea of what margins a company with a low PSR SHOULD produce on its sales and the opportunities presented by product/earnings glitches. In both cases, it allows me to look past a company's current difficulties and determine what the magnitude and probability of upside is going forward. Though my core approach is as a buy and hold, small cap growth investor, I can attest to the numerous profitable stocks I have uncovered thanks to the tools this book gave me. So, don't let any preconceived notions of the author get in the way of your enhancement of your investing skills. Buy the book, learn from it, and I honestly believe you'll pay yourself back many times over.

12 of 12 people found the following review helpful

4.0 out of 5 stars Focuses on PSR as a valuation tool July 6, 2002

By G. Shiau

Format:Paperback

I was first introduced to Fisher's concept of Super Stocks about 10 years ago. The idea behind the concept is buying stocks with a low Price-to-Sales Ratio (PSR), typically 1.0 or less. Simply having a low PSR is not sufficient to be a Super Stock. The valuation tool is combined with fundamental analysis (e.g. growth, margin analysis, balance sheet analysis, etc.) of companies to identify stocks with favorable characteristics that will make them Super Stocks. Fisher also introduces a complementery tool Price-to-Research Ratio (PRR) which is a measure of the company's reinvestment rate into growth.

Fisher spends a lot of time discussing how to make money off the "Glitch". Basically, he believes that many Super Stocks are stocks that have been hit by a "Glitch". A "Glitch" is a temporary setback experienced by a company that makes the out of favor (e.g. product life cycle delay, revenue short-fall, etc.) This attitude is indicative of his value-orientation in investing. In other words, his fundamental analysis may find a great stock, but he will wait for a pull-back from a "Glitch" to a more appropriate PSR before investing.

Overall, the concept of PSR is not so different from other valuation measures for "low-priced" stocks such as Price-to-Earnings or Price-to-Book. However, it doesn't hurt to have another tool in the kit.

On a more interesting side-note, Wall Street analysts have definitely not read this book. It is amusing to note that analysts in the hey-day of the Internet boom touted stocks with PSRs in excess of 10x. A careful fundamental analysis would have resulted in concluding that the growth, margins, and balance sheets of these companies did not justify such high valuations. Nothing in the business models indicated superior performance on any dimension. Even if a business model was found to be superior, prudence would have dictated waiting for a "Glitch".

9 of 9 people found the following review helpful

5.0 out of 5 stars One of the top-5 stock books I've read: December 29, 2005

By Tyler S. Inglis

Format:Paperback

I strongly recommend this book for your consumption: this book is extremely valuable for both its investing intelligence and its unique nature. No other book that I know of provides such a complete, and reasonable evaluation of revenue analysis, value opportunities via temporary profit margin squeezes, and screening for these opportunities via Price-to-Sales Ratios (PSRs.)

The heart of the book is that many investor's extreme focus on short-term bottom-line (P/E and earnings growth percentage movements) results can create extremely undervalued purchasing points in a great company with a temporary problem (determining this 'temporary' part is where his discussions about qualitative and margin anaylsis comes in.) Because revenue percentage movements tend to be both much more stable than earning percentage movements, and much less appreciated, PSR scanning may be the beginning of the most accurate type of mid-/long-term undervalued selection. (A good free scanner that has PSRs can be found here: http://moneycentral.msn.com/investor/finder/customstocks.asp)

Even if you reject the PSR method, this book's focus on profit margins and revenues can help you focus on what goes into the companies earning's movements. Not all earning growths are the same: you need both revenue growth for sustained earnings growth (you can only cut so much for so long,) and you need a healthy profit margin so that you can finance this revenue growth without large dept or share dilution. I would recommend being skeptical of a company that has growing sales but a sustained falling profit margin, I would be even more skeptical of earnings growth that isn't closely followed by revenue growth (almost disregarding it if it was a profit margin squeeze.) I think balance is key in this area.

The book also has good qualitative insights, has good appendixes, and is fairily concise to boot.

Some on this review page have objected to this book by claiming the author is arrogant. Nothing stood out to me in this book, however in "Common Stocks and Uncommon Profits and Other Writings" by his father Phil Fisher (probably the best qualitative fundamentals book by the way) he wrote in the preface about how his greater success comes from being a harder worker, being more driven, etc that was tasteless in my opinion (especially since Phil was then on his deathbed and it had a bit of a 'tribute' nature to it.) He's not that bad for what it's worth; I was surprised at how modest he seemed when he explained about how he turned a company around (when asked by the board he was on to act as a temporary CEO): he stuck to the point the appendix was making (i.e. that market research is much more important than expensive product R&D.) Anyhow, you're buying access to the author's ideas, not his friendship.

When part of me is secretly happy that this book seems to be out of print, my greed should be your hint. The Fisher's know what they're talking about, and Ken presents un-rehashed information.