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Common Stocks and Uncommon Profits and Other Writings (平装)
by Philip A. Fisher, Kenneth L. Fisher (Introduction)
| Category:
Investing, Value investing, Stock investing, Investment |
| Market price: ¥ 228.00
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¥ 208.00
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MSL rating:
 Good for Gifts |
| MSL Pointer Review:
High-quality, high-growth, 15-point checklist for buying stocks, this classic investment text is all about value. |
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AllReviews |
1 Total 1 pages 10 items |
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Warren Buffett (MSL quote), USA
<2006-12-28 00:00>
I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits... A thorough understanding of the business, obtained by using Phil's techniques... enables one to make intelligent investment commitments.
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A reader (MSL quote), USA
<2006-12-28 00:00>
This is a great classic book on investing. The author's language is at times somewhat hard, but the gist is absolutely crystal clear: invest in high-quality growth stocks and don't be afraid to buy them at a slight premium, plus investigate fundamentals, managements' ability and competitiveness very thoroughly before committing funds for very long holding periods (10 years or more). Fisher's intuitive, "scuttlebutt" approach to investing is certainly different (and more successful) than that of quantitative mathematical folks. As Warren Buffet often says: "It is better to be approximately right than precisely wrong". It is impossible to quantify how popular a company's products will be in the future or how honest and able the management is. The Fisher's 15 points will help you assess these and other unquantifiable but nevertheless absolutely vital things about an investment. |
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A reader (MSL quote), USA
<2006-12-28 00:00>
This book is an investment "classic" for a very good reason - its full of useful information still applicable to today's markets. The only drawback is the writing style which is very much "1950's white man style" but you get used to it and it doesn't detract from the information provided.
What can I say except: buy this book! Fisher walks you through the methods he used to select stocks, and this method is still relevent today. For those of you in the know, Warren Buffet has acknowledged his use of Fisher's ideas, so you know they have merit. For the average investor, Fisher's approach takes a lot of work (this is no "get rich quick" scheme), but the rewards are tremendous. After reading this book you will make your investment decisions with a lot more confidence.
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Dave Heinrich (MSL quote), USA
<2006-12-28 00:00>
There are only two books you will ever need to read to become a good investor. One of them is Graham's The Intelligent Investor (or better, Graham and Dodd's Security Analysis). The other is Philip Fisher's Common Stocks and Uncommon Profits.
It is telling that the man who combines the investment philosophies of both Graham and Fisher is widely acclaimed as the most brilliant investor alive today, Warren Buffet.
This is a book that you shouldn't just read once. It's a book you should read again and again. This is a book that you should read in cycles. Once you finish, you should read it again. It's short enough that you can read a chapter each night. This is a book that you should read until you can recite it word for word.
If you understand the principles in this book, and adhere stringently to Fisher's 15-point checklist for buying stocks, avoid his 10 don'ts, and purchase stocks at the right time, as he suggested how to do, you will almost certainly be investing in good companies.
If you then apply Graham's tests of value, you can avoid paying too much for those good companies. It is possible to have a good company but a bad stock (IBM is a great company today, and passes all of Fisher's criteria, but could you really justify buying it say $1,000 per share?).
When you do find companies that are good companies, but have bad stocks, keep an eye on them. What I mean by "bad stock" is that the stock - in your opinion - is priced too highly, even considering the company's excellent growth prospects (in other words, there is euphoria about it on Wall Street that goes beyond reason). Eventually, the market will realize that, even for that great company, it was paying too much. The stock price will drop, and then, whenever everyone else is running from the company in fear of doom, you can scoop it up (assuming that it i still a good company).
Just as it is possible to have a good company but a bad stock, it is also possible to have a bad company but a good stock. You should not buy a stock just because it is cheap in PE, PEG, PS, or Price:book ratio. It is possible that the management may be so terrible that the company, in a few years time, may very well justify such current undervaluation. Even if the management is competent, it is still possible that the company' performance may justify that low price in a few year's time. When a stock is greatly undervalued by these measures, and has passed most of Fisher's criteria, then it is a great buy, because the market will eventually realize that management is brilliant and the stock should be priced higher.
Now, many have objected that Fisher's methods take a lot of time. Clearly, they do. So do Graham's. Certainly, using both methods in combination with one another will take a lot of time (you can use Graham's criteria first, or Fisher's, then apply the other set of criteria). If you don't have the interest or time to pursue this, then you should not be investing in individual stocks yourself. Rather, you should find an advisor who does utilize these rules, or a mutual fund manager who does, and have him manage your money, if you want those kind of exceptional returns. In this case, you will still have to investigate the person managing your money, to make sure they're up to you're criteria, and stay on top of it, to make sure they continue to be. If you don't want to do that - if you don't want to put in that effort - then you should settle for ordinary returns, as Graham says. Invest in an index fund.
However, you should consider that there are not many stocks that will meet both Graham's stringent criteria, and Fisher's extremely stringent criteria. Of the tens of thousands of stocks, maybe 1,000 of them meet Graham's criteria. Of Those 1,000, maybe 50-100 meet Fisher's criteria. But, consider that you should only have to do this once, and thereafter only have to keep tabs on the companies (because you should have done it right the first time). Isn't several hours worth of work each night - even for months - worth finding a stock that will experience many hundreds of percent increase over 10 years?
To save yourself time, apply Graham's criteria first to eliminate fad stocks (dot-com), and other stocks that are priced too high. This will greatly cut down on your candidates. Then look at what's left and categorize it. Discard stocks from industries which you - based on sound analysis - believe aren't promising. Also discard those from industries which you don't understand. Of the remaining stocks, apply Fisher's criteria. To operate efficiently, apply his 15th criteria first: If there is any serious questions as to the management's trustworthiness to investors, don't even consider buying stock of the company, and don't waste any more time on it.
After reading these two books, you should know what criteria a company is to meet if it is a good investment, both Fisher's qualitative, and Graham's quantitative, criteria. You should apply the criteria that are easiest and quickest to filter through first. Then go through the criteria, progressively from more to less stringent. There's no point in wasting your time finding out about how great a company fairs on Fisher's first 14 criteria, only to find that it flatlines on the criteria of absolute importance (the integrity of management).
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Gregory McMahan (MSL quote), Japan
<2006-12-28 00:00>
Fisher is a growth stock adherent, and some have said that he is the Father of Growth Investing. Many contrast him to Benjamin Graham, whom more than a few have dubbed the Father of Value Investing. Fisher's book, Common Stocks and Uncommon Profits, provides an uneasy cornerstone for growth stock and technology stock investing. However, at some point, growth stock investing became synonymous with technology stock investing. As such, on one extreme, we have Fisher and growth (tech) stocks, and on the other we have Graham(and Dodd) and boring but predictable concerns with a margin of safety, and adherents to either extreme bicker back and forth as to which method for selecting common stocks for investment is better.
'Growth', I believe, is all fine and good, so long as you can find outfits that can hold their value, and continue to build value. Moreover, like its sister 'Growth', 'Opportunity' too is a wonderful thing, so long as 'Growth' and 'Opportunity' can be turned into profits and (dividend) checks in the mail.
Unlike Graham's sage advice, with which I agree 100 percent, I don't necessarily agree with Fisher's stance on many investment issues, but I do concede that the reasoning behind them does have merit. Take his position on dividends, for example. A company with excess cash and no reasonable opportunities for investment well within its circle of competence should send that cash to its shareholders, so long as it maintains a satisfactory reserve fund, can meet its financing needs, and has all of its investment needs met. Long experience has shown that companies that sit on top of a large (and growing) cash pile inevitably succumb to the temptation to squander it somehow or another (usually on vanity purchases), always to the detriment of its core business. Thus, companies that are generating cash in excess of their immediate and foreseeable needs (beyond a built-in cushion) should pay a dividend, and increase that dividend as earnings increase. Firms that don't do this, I believe, simply do not make for wise investments.
Furthermore, many have legitimately questioned the applicability of one technique underlying Fisher's investment method- the use of scuttlebutt. Most concerns have centered around how to go about doing it, which to me raises certain warning flags, and not on more important facets such as its usefulness (with regard to the kind of information gleaned) in practice and its potential (negative) consequences. One must exercise extreme caution when using scuttlebutt, for the following reasons. First, people, from individual investors to managers at publicly listed companies, especially the smaller tech outfits, know about this book, and so they also know how to use the book's information in order to present themselves so as to attract your investment dollars. Second, reliance on scuttlebutt depends to a great extent on how it comes your way (and Fisher partially acknowledges this, but limits his discussion to 'disgruntled' former employees of a company under consideration), and you have to exercise caution here, for you may find yourself in big trouble with the Federal Boys, or worse- with legal vultures circling over your head, should you act on it. Third, companies have a distinct disliking to scuttlebutt, as it may serve as one source of leaks of trade secrets or other sensitive information. Fourth, related to the third point, companies may intentionally use 'scuttlebutt' to 'plant' disinformation or even misinformation before small-time investors, specifically, and institutional investors, always. Finally, for those intrepid souls wondering how to put scuttlebutt to work, as an aside, for anyone who has attended college or some trade school, getting the inside story may be as easy as contacting the alumni office of your alma mater, or even as simple as hitting up a former frat, sorority or other college club member. More simply, one can directly contact folks involved in industry trade organizations as well.
In my mind, Mr. Fisher's method works best when one applies it to large and established concerns. When I ponder the investment problem, I come to the conclusion that your most reasonable assessment of a company must rest on an analysis of the company's past behavior, coupled with a current snapshot of the company in the context of its industry, and not on scuttlebutt. But then, Ben Graham said pretty much the same thing over and over again in his book Security Analysis.
Overall, I liked Fisher's Fifteen Points, but I liked the little mini-book, Conservative Investors Sleep Well, which forms Part Two of the book, even better. You could obtain the same information by reading a denser book like Competitive Strategy, by Michael Porter, but getting the same information, in condensed form, from a seasoned and successful practitioner like Mr. Fisher imparts a level credibility, reliability and trust that all other sources lack. I also like Fisher's emphasis on understanding the business (and visiting the company if necessary to get detailed information, wherever possible, necessary and appropriate), a point that Graham, although he did not overlook it, did not specifically emphasize.
One must understand Fisher in order to know what to expect if all goes well with investment operations. In contrast, one must understand Graham in order to know what to expect if everything goes to hell in a handbasket. One can not successfully invest with only one or the other, as doing so will lead to mediocre results at best, and poor results more typically. One needs to know both.
Although I will not put the concept of scuttlebutt to practice, as it strikes me as being both dangerous and speculative, I will put the rest of the information to work. In sum, I will definitely keep the book, and it will sit next to my copies of Benjamin Graham's The Intelligent Investor and Security Analysis, where it will remain as one of my must-have and must-consult investment references.
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Joe Cool UMSL quote), USA
<2006-12-28 00:00>
I first read this book over ten years ago, and like the other reviewers, I too found it a difficult read. When I first read it, I thought the advice was somewhat impractical for the small time investor (try to imagine calling Bill Gates asking him what he thought of Steve Jobs' company). Graham's security analysis was much easier for the little guy investor to apply. Yet Fisher's techniques were and are used by the big time investors ( most notably Peter Lynch, and though I don't think he gives Fisher enough credit, Warren Buffett). Even the rankings of "Top CEOs" by Forbes, BusinessWeek, Fortune etc. was based on Graham's security analysis. Then came the corporate scandals of the 1990's, the Sarbanes-Oxley Act, and Elliott Spitzer of New York and now the little guy investor can apply Fisher's theory of investing. Fortune Magazine's CEO ranking has as much to do about corporate governance as it does with security analysis. There are websites devoted entirely to corporate governance. The Institutional Shareholder Service was created solely to act as a corporate governance watchdog. I recently re-read Common Stocks. It's still a difficult read and you can't read it in one day or even in one week. It's a book that you have to read and re-read to get the most out of it. The most useful chapters for an investor are Chapter 3 "What to Buy: the fifteen points to look for in a common stock", Chapter 8 "Five Don'ts for Investors, and Chapter 9 " Five More Don'ts for Investors." Fisher's Common Stocks and Graham's the Intelligent Investor are the two basic building blocks that every investor must master to be successful in the stock market. |
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Brian Hawkinson (MSL), USA
<2006-12-28 00:00>
Fisher is an absolute must for all investors, amateur and professional alike. He writes down such sage advice that you can't help but be awed. Fisher writes as though he is a mentor or a professor, teaching the intricacies of the market and how best (at least the method that he used; he states himself that everyone's method of investing will vary) to increase your own net worth.
I must say that I can't really see myself using the fifteen points that he says he follows. For one, the common everyday investor would have a lot harder time applying the points and interviewing executives and others who have some working knowledge of that industry and company. His method is called the scuttlebutt method, in which you do your research and gain 50% of your knowledge of the company before you go to the company and interview the top executives, the competitors, the suppliers and the employees and so on. Although I must say I see the worth in what he is saying, I can't see the common investor in today's market being able to apply this method (Fisher himself says that because he was a fund manager he had connections to executives and scientists and people high up that he could speak to, which isn't something most people have access to).
Other than the fifteen points (which are a good broad way of looking at a company with some that can be applied) and the scuttlebutt method, the rest of the book is an invaluable tool for any investor. Even part two, Conservative Investors Sleep Well, imparts some invaluable information that every amateur investor should have read. Part three parts with some useful insight as well, although it focuses more on how Fisher came to have his philosophy and thus is more of a chronological reiteration of his past.
Fisher is a must for all investors. With this book you don't get much on the practical how to of investing, the actual know how, but more of a philosophy and a lesson on investing, which is even more useful. I would highly recommend this book to everyone. |
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Joshua King (MSL quote), USA
<2006-12-28 00:00>
This is another book for those of us who want to be like Warren Buffet when we grow up. It is a perfect complement to The Intelligent Investor by Benjamin Grahm. While that book focuses on value investing this one focuses on investing for growth. Warren Buffett attributes 15% of his strategy from Philip Fisher. I read this book due to Mr. Buffett's recommendation. I will read anything a man suggests when his net worth is $40 billion.
My biggest key learning from this book was how Mr. Fisher focused on earnings as what determines the value of a stock. He gave an analogy of if you were able to buy stock in your graduating high school class based on what you believed would be there future earnings potential. How would you determine their value? Would you later sell stock in a student who went on to college and had huge earnings just because he was then overvalued? Would you want to buy stock in a student who went on to earn poorly just because he had potential for more growth? This analogy shows we are buying corporate earnings when we buy stock, and quality and future growth is what we are looking for.
This book gives 15 points to look for in buying stock. Mr. Fisher also had a chapter on why he does not believe in efficient market theory because the performance in stocks always shows they were not valued correctly because the future performance is not reflected in the current price, stock traders have never been able to price stocks correctly, if they did their would not be such variances in stocks a year later, some go up 1000% some go down 80% rarely does the P/E ratio predict this. I highly recommend this book in your financial library. |
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James W. Michaels (Former editor of Forbes) (MSL quote), USA
<2006-12-28 00:00>
Little known to the public, rarely reviewed, 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 espoused. (James W. Michaels, former editor of Forbes) |
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Gordon (MSL quote), USA
<2006-12-28 00:00>
I really liked this book and will expand my reading to include other books with a similar theme. Fisher promotes what is called value investing. There are not too many good books available on the subject, but this book in my humble opinion is one of the best. You can't go wrong following the principles set forth by the author. I also recommend a little book titled How to Make Money in the Stock Market-Buy 2,500 different stocks for $1000 - Pay no Commission. Easy to read packed with precise directions for success. A cookbook for the investor just follow directions. I enjoyed this book a great deal. It shows how indexing and diversification strategies work and why they are so important to investing success. Unlike many other books on the subject, this one is not only informative, but also useful. There should be no question as how to implement the author's strategy and measure your progress. The author does not dwell on lengthy longwinded discussions but cuts to the quick with useful recommendation and directions for the novice and experienced investor as well. |
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1 Total 1 pages 10 items |
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