"I am an eager reader of whatever Phil [Fisher] has to say, and I recommend him to you." - Warren Buffett 

One of the greatest and most respected minds in investment, Philip Fisher, shared the secrets of his investment success in this updated classic book on investing in stocks, Common Stocks and Uncommon Profits. He introduced the now-famous concept of the ‘scuttlebutt' approach. 

This concept emphasizes that investors must develop a deep understanding of any business they invest in by interviewing its competitors, employees, customers and clients and not relying on information from the management team's rosy pictures for the future. 

He stated emphatically that from his experience this is exactly how investors can improve their odds of success in investing. Throughout his life, he notoriously owned only a small core group of stocks in his portfolio over a very long timeframe. In fact, he often never sold any stocks. 

In Common Stocks and Uncommon Profits, Fisher also lists the five "don't" rules for investors:

1.  Don't buy into promotional companies.

2.  Don't ignore a good stock just because it is traded over the counter.

3.  Don't buy a stock just because you like the tone of its annual report.

4.  Don't assume that the high price at which a stock may be selling in relation to its earnings is necessarily an indication that future growth in those earnings has largely been already discounted in the price.

5.  Don't quibble over eighths and quarters

Fisher's book also lays out the fifteen things that every successful investor should look for when considering common stock investments. Fisher carefully goes over these important steps in order to help investors find the absolute best companies for their money. He also provides great direction as to when it is best to sell and when to hold on to stocks. In fact, he believed that if an investor truly found the right company worth investing in, he argued that the investor may never need to sell at all.

Sounds Buffett-like, doesn't it? Well, Buffett was a friend and fan of Fisher.

In this book, Fisher shares the great lessons he learned over the years from his own network of investment industry sources and experts. He also disusses the often-quoted concept of diversification: He focused on a few ideas and concepts that were truly remarkable rather than focusing on a bunch of options which were just above-average.

He was an investing legend and left behind this classic book for the rest of us to learn from and enjoy.

"This book is dedicated to all investors, large and small, who do NOT adhere to the philosophy: I have already made up my mind, don't confuse me with the facts." - Common Stocks and Uncommon Profits

Reviews:

"...written by an American Investment Genius.... We are delighted to have the opportunity to reproduce an extract from this classic, recently reissued..." - Financial Director

"...these updated classics are packed with investment wisdom..." - What Investment

About the Author:

One of the greatest minds in investment, Philip Fisher lived from 1907 to 2004. After the Great Depression, he worked from a modest office situated on the West Coast of the United States. In addition to teaching at the Stanford School of Business, Fisher also wrote a number of books, one of them being the classic Common Stocks and Uncommon Profits. He received a great deal of recognition because of his notoriouly small selection of just eight stocks which he bought at low prices and which went on to produce amazing returns. For example, he purchased stock of Motorola in 1955 at a great price, and still owned that stock when he died 43 years later. 

Category:  Personal Finance