Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics) [Paperback]

Philip A. Fisher (Author)

Book Description

Publication Date: June 7, 1996 | Series: Wiley Investment Classics (Book 5)

"You will find lots of jewels in these pages that may do as much for you as they have for me."-from the Introduction by Kenneth L. Fisher Forbes columnist

Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago, are not only studied and applied by today's finance professionals, but are also regarded by many as gospel. He recorded these philosophies in Common Stocks and Uncommon Profits, a book considered invaluable reading when it was first published in 1958, and a must-read today.

Acclaim for Common Stocks and Uncommon Profits

"I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits...When I met him, I was impressed by the man as by his ideas. A thorough understanding of the business, obtained by using Phil's techniques...enables one to make intelligent investment commitments."-Warren Buffett

"Little known to the public, rarely interviewed and accepting few clients, Philip Fisher is nevertheless read and studied by most thoughtful investment professionals . . . everyone will profit from pondering-as Warren Buffett has done-the investment principles Fisher espouses."-James W. Michaels Editor, Forbes

"My own copy [of Common Stocks and Uncommon Profits] has underlinings and marginal thoughts throughout."-John Train Author of Dance of the Money Bees

Editorial Reviews

From the Publisher

Regarded as one of the pioneers of modern investment theory, Philip A. Fisher's investment principles are studied and used by contemporary finance professionals including Warren Buffett. Fisher was the first to consider a stock's worth in terms of potential growth instead of just price trends and absolute value. His principles espouse identifying long-term growth stocks and their emerging value as opposed to choosing short-term trades for initial profit. First published in 1958, this investment classic is considered a must-read as the foundation for many of today's popular investment beliefs.

From the Inside Flap

Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher Hailed by Forbes magazine as "one of the seminal figures of modern investment thinking," and a "giant" by investment wizard Warren Buffett, Philip Fisher is one of the most influential investors of all time. Admired for his investment success, he is even more widely respected for his sound investment philosophies—philosophies that have withstood the test of almost forty years and that are regarded as gospel by the investors of today. These principles and theories were introduced by Fisher in Common Stocks and Uncommon Profits. Initially published in 1958, it is today considered an invaluable reference for investment success. Now, for the first time, a new, single edition brings this timeless classic together with the investment wisdom and insight offered in Fisher’s other acclaimed writings—Conservative Investors Sleep Well and Developing an Investment Philosophy. As the first to consider a stock’s worth in terms of potential growth rather than price trends and absolute value, Fisher laid the foundation for many of today’s popular investment beliefs. His principles of selecting long-term growth stocks for their emerging value over short-term trades for initial profit continue to be studied and applied by today’s top finance professionals. In Common Stocks and Uncommon Profits, Fisher shares his philosophy, offering valuable insights into the most fundamental and important aspects of buying and selling stock. Here are solid guidelines on when and what to buy, sound reasons for selling common stock, as well as critical information on profit margins and dividends. There is also Fisher’s famous list of Top-Ten "Don’ts" for investors, complete with warnings against buying into promotional companies, over-stressing diversification, following the crowd, and buying stock just for the "tone" of its annual report. As an ideal complement to Common Stocks and Uncommon Profits, Conservative Investors Sleep Well and Developing an Investment Philosophy explore, respectively, the myriad intricacies of conservative investments and the genesis of Fisher’s unique philosophy. Both selections offer further insight into the wisdom of this great investor. As indispensable today as when they were first published, these classic writings provide keys to investment success which every investor will relish. --This text refers to the Hardcover edition.

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Product Details

• Paperback: 288 pages
• Publisher: Wiley (June 7, 1996)
• Language: English
• ISBN-10: 047111927X
• ISBN-13: 978-0471119272
• Product Dimensions: 8.3 x 5.5 x 0.8 inches
• Shipping Weight: 14.4 ounces
• Average Customer Review: 4.4 out of 5 stars  See all reviews (26 customer reviews)
• Amazon Best Sellers Rank: #183,418 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

72 of 74 people found the following review helpful

4.0 out of 5 stars Picking stocks by analysing businesses not accounts May 5, 1997

By A Customer

Format:Paperback

When you have read Benjamin Graham analysing current ratios and balance sheets until you have decided that stock picking can be done by computer then (and only then) is it time to read Phillip Fisher.

Phillip Fisher searches for "growth stocks", companies with superlative management (superior sales force, superior research and development, clear focus on the business) and he holds their stocks FOREVER.

You can read this book and find not a single substantive mention of balance sheets, solvency, current ratios or any of the other things that most seasoned stock pickers rely on. Instead you find tips for analysing the scuttlebutt that you hear about a company and for testing whether management cuts the mustard. Thirteen or so of the "Fifteen Points" in the second chapter are worth the purchase price of the book and more.

These points summarise as:

* The management are technical geniuses.
* The management know how to milk the existing business, and
* The management resist the institutional imperative.

Unlike Phillip Fisher however, I am not sure the management need to be technical geniuses. Indeed Phillip Fisher's notion of what constitutes a growth stock is quite narrow. He is almost obsessive about research and development. New products are to him the major determinant of growth. He would never have picked Coca-Cola or McDonalds as growth stocks because their product is not technically innovative. Yet a reader of Phillip Fisher may have picked these stocks. They pass the bulk of Fisher's fifteen points with flying colours. Just making hamburgers is not making Silicon chips.

If you could combine Fisher's analysis with Graham and purchase these stocks at reasonable prices you might have even done well. (Incidently I am a Dow disbeliever from Australia and I still think McDonalds is reasonably priced.)

Certainly Fisher would not allow you to hold McDonalds and Coke above a well run techno company. Fisher regards techno stocks with a sort of awe. And regards anybody that holds more than twenty stocks as financially incompetent. [I agree with him on the latter point, and hence hold a small number of non-techno companies, which kind of suits a technophope like me.]

Fisher would have you purchasing Intel at $150, something which I am finding it increasingly difficult to justify (though I have been wrong on that stock before). Intel passes ALL of Fisher's fifteen points. Value does not play a part in Fisher's Analysis. He pays lip service once or twice, but there is precious little discussion on how to pick value. And that is where I think the book falls down.

This is actually quite a limited failing. There are two ways to proceed with Fisher. One: Look for businesses that pass Phillip Fisher's tests. perhaps thirteen of the fifteen points is adequate. Then put through the second filter of "are they crazy on a Benjamin Graham analysis". This will make sure that you do not pay too much for a good business.

Alternatively Benjamin Graham filter stocks. Get the listing down to say 200 or so that are not too expensive (particularly vis earnings rather than assets). Then put them through the Phillip Fisher filter. Buy the ones that pass best. This way you will not be tempted to buy a bad business just because its cheap.

I tend to operate using the latter method. However I would never have found McDonalds that way. So maybe I should do a bit of both.

Cheers and good hunting.

46 of 46 people found the following review helpful

5.0 out of 5 stars Solid read; practical ideas March 31, 1997

By A Customer

Format:Hardcover

This book is a classic in the investment field. Fisher is
acknowledged as one of Warren Buffet's intellectual
fathers and it shows. However - like many books on Buffett -
Fisher's approach relies on the ability of the individual
to spend large amounts of time researching companies and
stocks. While this minimizes the risk of investing badly,
it also assumes that picking stocks is your life.

I recommend that anyone interested in investing read this
text as an example of how to think about companies in which
to invest. However, be prepared that it won't be as directly
usuable as, say, the writings of Peter Lynch.

91 of 98 people found the following review helpful

5.0 out of 5 stars 1/2 Your Investment Library May 1, 2000

By Leonard R Budney

Format:Paperback|Amazon Verified Purchase

Fisher's book should be 1/2 your investment library; the otherhalf should be Ben Graham's ``The Intelligent Investor''. WarrenBuffet, the world's most successful investor, describes himself as ``85% Graham, 15% Fisher.''

Fisher explains the qualitative side to value investing, just as Graham explains the quantitative side. You really need both. If you follow Graham's advice insensitively, then you will find stocks which are selling cheap--because the company is truly in trouble. That's where Fisher comes in: you should examine low-priced companies from Fisher's perspective to find the ones which truly are bargains.

... Online discussions are no substitute for firsthand discussion with employees, competitors, etc. You simply can't meet enough people online; some companies' employees aren't even on the Internet. ... you will end up investing only in tech stocks--which I would consider extremely short-sighted.

On the other hand, online discussion is considerably better than nothing. Don't neglect the information you can find online! This source of information will become increasingly important over time.