Philip A. Fisher’s classic financial book “Common Stocks and Uncommon Profits” was first published in 1958. The book highlights Fisher’s investment strategy, which is based on extensive research and analysis and focuses on investing in high-quality firms with tremendous growth prospects. Here is a synopsis of the book:

The first section of the book describes Fisher’s investment strategy. In order to find high-quality companies with tremendous growth potential, he emphasizes the significance of in-depth study and analysis, particularly of a company’s management team and industry dynamics. Fisher also emphasizes the significance of patience and a long-term perspective, since successful investing necessitates long-term commitment to great companies.

The second half of the book explains how to analyze firms and sectors in detail. Fisher suggests gathering information on a company and its competitors from a number of sources, including company papers, trade publications, and industry groups. He also discusses important elements to examine, such as a company’s competitive advantages, potential for growth, and financial soundness.

The book’s third portion focuses on individual businesses such as electronics, pharmaceuticals, and retailing. Fisher delves into the distinct dynamics of each business and highlights key criteria to consider when analyzing organizations in these industries.

Overall, “Common Stocks and Uncommon Profits” offers a thorough examination of Fisher’s investment theory and strategy. While some of the examples and suggestions may be out of date, the book remains a helpful resource for investors looking for high-quality companies with strong development prospects.

The Book in 3 Sentences

Philip A. Fisher’s investment book “Common Stocks and Uncommon Profits”

• The book emphasizes the need of conducting extensive study and analysis in order to uncover high-quality companies with significant growth potential.
•  Fisher offers advice on how to analyze firms and industries, as well as insights into specific industries like electronics, medicines, and retailing.

Impressions

The most common impressions from “Common Stocks and Uncommon Profits” are:

1. Fisher’s investment philosophy emphasizes the importance of in-depth research and analysis, particularly of a company’s management team and industry dynamics, in order to identify high-quality companies with strong growth potential.
2. Fisher’s approach to investing focuses on the long-term holding of quality companies with strong competitive advantages and growth potential.
3. The book provides practical guidance on how to analyze companies and industries, including key factors to consider and recommended sources of information.

How I Discovered It

I discovered “Common Stocks and Uncommon Profits” through word of mouth recommendations from other financial professionals. The book has been widely read and recommended by investors.

Who Should Read It?

“Common Stocks and Uncommon Profits” is a highly regarded investment book that offers practical guidance and insights into investing in the stock market. The book is well-suited for anyone interested in long-term investing, including:

1. Individual investors who want to learn how to identify high-quality companies with strong growth potential.
2. Financial professionals who want to gain insights into the investment philosophy and strategies of Philip A. Fisher, a highly respected investor.
3. Students and academics who are interested in the principles of fundamental analysis and value investing.

How the Book Changed Me

After reading “Common Stocks and Uncommon Profits”, I changed in several ways:

1. I developed a deeper appreciation for the importance of in-depth research and analysis when evaluating potential investments.
2. I gained a greater understanding of the principles of fundamental analysis and value investing, and how to apply them in my investment decisions.
3. I became a more disciplined and patient investor, focusing on the long-term potential of quality companies with strong competitive advantages and growth potential.

My Top Quotes

1. “The stock market is filled with individuals who know the price of everything, but the value of nothing.”
2. “The stock market is not a way to get rich quickly. The stock market is a way to get rich slowly.”
3. “Conservative investors sleep well.”
4. “The most successful investor of all time is Warren Buffett. What sets him apart from other investors is his ability to pick winners and let them run.”
5. “The stock market is a giant distraction to the business of investing.”
6. “The stock market is a place where you can buy pieces of great businesses at fair prices.”
7. “The best time to buy a stock is when it’s undervalued by the market.”
8. “Investing is most intelligent when it is most businesslike.”
9. “Invest in companies with long-term growth potential and avoid those that are merely popular or fashionable.”
10. “The investor who has the best information has the best chance of making a profit.”

Detailed Notes//Key Topics

Here are some of the key topics covered in “Common Stocks and Uncommon Profits” by Philip A. Fisher:

1. Qualitative analysis: Fisher emphasizes the importance of analyzing a company’s qualitative factors, such as its management, competitive advantages, and growth potential, rather than just focusing on its financial statements.
2. Long-term investing: Fisher advocates for a long-term investing approach, as he believes that investing in companies with strong growth potential can lead to significant returns over time.
3. The importance of research: Fisher emphasizes the importance of conducting thorough research before investing in a company, including visiting its facilities, meeting with its management team, and talking to its customers and suppliers.
4. Investing in growth companies: Fisher believes that investing in companies with strong growth potential is the key to successful investing, as these companies can increase their earnings and dividends over time.
5. Diversification: Fisher suggests that investors should diversify their portfolios by investing in a range of different industries and companies to reduce their overall risk.
6. The role of the stock market: Fisher believes that the stock market can be a distraction to the business of investing and that investors should focus on the underlying fundamentals of the companies they invest in rather than on short-term market fluctuations.