StockBox Book Rec: Common Stock Stocks and Uncommon Profits
By Philip A Fisher
To Check it Out on Amazon Click Here
Recommmended for investors with medium to high experience levels
Review By Chandler Lutz
On the front cover of my edition of Common Stocks and Uncommon Profits there is a quote from Warren Buffett, “I am an eager of whatever Phil (Fisher) has to say, and I recommend him to you.” On the back cover back cover is another Warren Buffett quote: “I sought out Phil Fisher after 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.”
The Short Story:
The recommendation by Buffett is all that really needs to be said to convince you to read this book. This is my second favorite investing book (next to One Up On Wall Street). This book covers the qualitative side of investing in a way I have never seen elsewhere.
In Depth Analysis:
Fisher ran a private investment counseling business where he was not concerned about small gains in the 10 to 20 percent range over a year or so, but aspired to buy stocks in that returned 1000 percent or more. Fisher was striving for tenbaggers before the term really came into existence (a tenbagger is simply a stock that goes up by 1000 percent. It was made popular by Peter Lynch with his best selling book One Up on Wall Street).
Common Stocks and Uncommon Profits is most known for its “15 points.” These 15 points are basically the criteria that Fisher asserts a company must meet in or to qualify as a sound investment. Surprisingly, only one of these points is quantitative in nature. The rest cannot be found on the balance sheet or the income statement.
As valuable as these points are, the book is so much more than just these points. Fisher goes into when to buy and when to sell as giving important do’s and don’ts for investors.
I’m going to keep the rhetoric here to a minimum; mostly because I feel like the recommendation from Buffett trumps whatever I have to say. I just want to add one more thing here. This book is a more in depth than most and may be a little intimidating to a novice investor. If you have some investing experience, however, this book can serve as an invaluable resource. If want to look at the book on Amazon, click here.