COMMON STOCKS AND UNCOMMON PROFITS by Philip A. Fisher
Author: Philip A. Fisher was a very successful investor of his time. After graduating from Stanford in 1928, he led his company Fisher & Co. from 1931 to 1999. He had a substantial influence on Warren Buffett. In fact, Mr. Buffett claimed to be 85% Graham, and 15% Fisher. Probably, that proportion is inversely proportionate today.
Book: In this bestseller book, Mr. Fisher explains his investment approach and philosophy, based on quality and growth of businesses. The key chapter is the third. There, he explains what to buy based on 15 key points. Among them; An expanding market, continuous development of new products, efficient R&D, solid sales organization, great profit margins, great labour relations, awesome executive relations, good industry specifics, management integrity, etc. Other key point of the book (Ch.2) is the “Scuttlebutt method”, that is, conducting due diligence about a company and its investment merits by talking to all kinds of people related to it like customers, vendors, trade associations, competitors and employees (former and current). Finally, some other interesting considerations are made about diversification, the EMH or the buying/selling process.
Opinion: This is a book focused on finding great businesses, so perhaps misses somewhat the point of the price you’re paying. That being said, it is one of the most valuable books I’ve read. I found a “detail” interesting (see 4th picture above). He discusses the buying opportunities in war periods (perhaps applicable today due to Covid-19). He clearly understands the asymmetric risk/reward payoffs of making bets there + the role of central banks. Final consideration for all those ESG folks: Fisher already considers all your points in 1958. Stop making courses and creating new funds as if you had discovered anything new.
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