Common Stocks and Uncommon Profits and Other Writings summary
Book Summary & Synopsis
What's it about?
This book introduces Philip A. Fischer's principles of growth investing, focusing on identifying exceptional companies by examining people, products, and company secrets rather than just financial ratios. It outlines key characteristics of growth companies, investment styles, and methods like 'scuttlebutt' to research thoroughly. Fischer's approach, which influenced even Warren Buffett, emphasizes long-term holding and understanding a company's intrinsic value.
Who is it for?
- Investors seeking to identify and invest in long-term growth companies.
- Individuals interested in Philip A. Fischer's influential investment philosophy.
- Anyone looking to understand the 'scuttlebutt' method for in-depth company research.
Meet the author
Philip A. Fischer was an influential American investor and author, best known for his book 'Common Stocks and Uncommon Profits and Other Writings,' which introduced the concept of growth investing and emphasized qualitative factors in stock selection.
From the Introduction & First Chapter
Introduction
Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher Common stocks and uncommon profits introduces the principles of growth investing to identify exceptional companies. What makes a stock a true growth stock? Is it the current stock price?
Or is it the market trend? Or is it something hidden deep inside the company DNA? In 1958, Philip Fisher wrote one of the most influential books on growth investing. He did not look at stock charts or financial ratios.
He looked at the people, the products, and the secrets. And he used one simple method to beat Wall Street. His influence is so profound that even Warren Buffett traveled to meet him. Buffett famously remarked that he was 85% Benjamin Graham.
He was also 15% Philip Fisher. Fisher's principles helped him buy exceptional businesses that compound wealth over decades. This summary lays out the key characteristics of a growth company. It helps you determine your investment style.
Like a detective, a successful investor researches thoroughly before putting money on the table.
The Traits of Outstanding Businesses
The Traits of Outstanding Businesses. Smart investment strategies focus on companies with long-term growth potential. Common perception views investing as fast-paced and brutal. Investors buy and sell on a whim, seeking quick profits.
Smart investing involves much more thought and planning. It is ideally focused on the long-term. Smart investors do not seek quick profits. They look for companies with long-term growth potential.
It is not easy to identify these companies. Indeed, many stocks are either over or undervalued. Smart investors look for undervalued companies with growth potential. When the time is right, these companies grow rapidly.
An investor can double or triple his initial investment. Luckily, growth companies share common characteristics. They offer products that sustain high sales for years. Growth companies invest in research and development.
This helps them grow when existing products reach maturity. The 1950s was a great time for television makers. But soon, nearly everyone had a black and white television. Television companies faced flat growth and had to adapt.
They needed to develop the color television. Motorola used to produce televisions and radios. Management had the foresight to enter the communications business. They used the company technical skills to grow.
Meanwhile, sales for other television makers flatlined. Companies with growth potential have solid management. They also have good employee relations. Do not invest if employees are unproductive.
Avoid companies where executives cannot inspire a shared vision.
Table of Contents
- 1 Introduction 1:21
- 2 The Traits of Outstanding Businesses 1:54
- 3 Learning Through Scuttlebutt 1:42
- 4 When to Buy 1:44
- 5 When to Hold and When to Sell 2:05
- 6 The Conservative Investor's Approach 1:17
- 7 The Value of Great Management and Employees 1:05
- 8 Protecting Long Term Profits 1:21
- 9 Price Versus Value 1:56
