Common Stocks and Uncommon Profits and Other Writings

Improve your investment strategy

by Philip A. Fischer

4.6(2,588 ratings)

12 min read

Brief overview

This book explores a thoughtful and practical approach to identifying and investing in companies with genuine long-term potential. It emphasizes conducting in-depth research, understanding management quality, and holding onto great businesses through market shifts. Readers can expect guidance on spotting growth opportunities, evaluating corporate fundamentals, and staying patient amid fluctuating stock prices.

Introduction

Imagine walking through a marketplace brimming with countless stocks, each clamoring for your attention. It’s easy to feel overwhelmed. This book sets out to demystify that chaos and hand you the tools to make wiser, more focused decisions.

Rather than frantic trading or momentary hunches, the core idea here is a patient, inquisitive method of investing. By looking deeper into how a company actually runs, you empower yourself to see past the noise of public opinion.

The author encourages a shift away from short-term fixes, urging you to consider a company’s management, growth strategy, and competitive edge as primary clarifiers. In the chapters ahead, you’ll explore a structured approach that sets apart high-quality businesses.

As you proceed, remember that consistent returns often come from truly understanding each investment on a personal level. This foundation forms the bedrock upon which lasting wealth can be built.

Why Growth Stocks Matter

Some companies offer only a flicker of promise, while others steadily expand, almost methodically. The difference can be surprising returns for the investor who recognizes a genuine growth story. Yet, high growth alone does not ensure success; it must be backed by real advantages and capable leadership.

Growth stocks matter because they harness the forces of innovation and market demand to increase their earning power. Instead of chasing bargains that appear cheap in the moment, you focus on businesses that can keep building their profits over many years.

Examples from the past reveal how electronics or chemical companies unexpectedly thrived by rethinking their strategies. This points to a key realization: if an enterprise is 'fortunate because it is able,' it can seize new opportunities that less agile rivals cannot.

Time and again, patient investors who spot these evolving businesses early enjoy gains far exceeding the typical market returns. Understanding why a company will keep growing—rather than whether it just had a good quarter—makes all the difference.

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What is Common Stocks and Uncommon Profits and Other Writings about?

Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher offers timeless insights into the art of long-term investing, urging readers to look beyond short-term market noise and instead focus on understanding businesses on a deeper level. Central to Fisher's philosophy is the concept of "scuttlebutt"—an extensive research method to uncover nuances about potential investments. This involves digging beyond company reports to gain perspectives from vendors, customers, and industry insiders, thus identifying firms capable of consistent growth.

Fisher stresses the importance of aligning with companies helmed by visionary leaders who emphasize innovation and sustainability. He highlights that true investment success comes from identifying high-quality stocks, buying them at reasonable prices, and holding them long enough to realize substantial gains. Hence, the book is a beacon for those seeking to avoid reactionary decisions, embodying patience and thorough analysis as keys to building enduring wealth.

Review of Common Stocks and Uncommon Profits and Other Writings

Philip A. Fisher's Common Stocks and Uncommon Profits stands as a manifesto for patient and informed investing. The book's strength lies in its focus on thorough research and long-term thinking. Employing the "scuttlebutt" method, Fisher encourages prospective investors to delve deeply into understanding a company's true capabilities and potential missteps. This unique approach is what sets the book apart, providing practical ways to gather intelligence beyond standard numerical reports.

Fisher's writing style is accessible yet profound, making complex concepts digestible for both experienced investors and novices. He articulates strategies for identifying growth stocks, emphasizing the importance of management quality and a company's R&D commitment. Readers can apply these insights to build portfolios based on solid groundwork, understanding when to seize buying opportunities during market dips without succumbing to herd mentality.

Highly recommended for individuals seeking a disciplined investment strategy, this book offers valuable lessons in resilience, perseverance, and judgment. Readers leave with actionable insights and a roadmap for navigating seemingly chaotic financial markets. Fisher eloquently bridges tactical advice with philosophical musings, reshaping how investors perceive risk and reward.

Who should read Common Stocks and Uncommon Profits and Other Writings?

Aspiring investors seeking to transition from short-term trading to long-term investing, benefiting from Fisher's insights on patience and detailed research.
Finance students and educators who appreciate well-reasoned investment frameworks that have historical relevance and practical application.
Professionals in financial advisory roles who need a foundational understanding of how management quality and strategic alignments impact stock value.
Corporate leaders and managers interested in understanding how investors evaluate a company's potential, adding value to their stewardship capabilities.
Seasoned investors looking for a refresher on timeless principles that avoid the pitfalls of market speculation, still standing the test of time.

About the author

Philip A. Fisher was a renowned American investor and author, best known for his influential work in shaping the growth investing philosophy. He earned his A.B. in economics from Stanford University in 1927 and went on to found his own investment counseling firm, Fisher & Co., in 1931, which he managed until his retirement in 1999. Fisher's investment strategies, detailed in his book "Common Stocks and Uncommon Profits and Other Writings," focused on long-term investments in high-quality companies with growth potential, emphasizing the importance of analyzing a company's management, products, and competitive advantages. His work has had a lasting impact on the field of finance and continues to influence investors worldwide.