Common Stocks and Uncommon Profits and Other Writings - Book Review
Philip A. Fischer famously said:
Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies they thoroughly know and far too much in others which they know nothing about.
and
The successful investor is usually an individual who is inherently interested in business problems.
He dropped out of Stanford to get his ‘education’ at the Anglo London Bank as an analyst. Post another short stint at a stock firm, he started his own Fischer and company where he worked till the ripe old age of 91. His client list was carefully picked and he was a very private man. His investments though were hardly traditional. Fischer chose to invest in companies that were known for their innovation. He chose his stocks carefully and held them in long positions. Motorola and Texas instruments were some of his picks.
His investment philosophy was not unlike an art form. He felt that a business must be studied in depth before its stock is picked or not pick it at all.
“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.” —Warren Buffet
Common Stocks and Uncommon Profits and Other Writings has a foreword and preface by Fisher’s equally successful son Ken Fisher.
In part one titled Common Stocks Uncommon Profits, Fisher includes chapters on Clues from the Past, What “Scuttlebutt” Can Do, What to Buy: The Fifteen Points to Look for in a Common Stock, What to Buy: Applying This to Your Own Needs, When to Buy, When to Sell: And When Not To, The Hullabaloo about Dividends, Five Don’ts for Investors, Five More Don’ts for Investors, and How I Go about Finding a Growth Stock
In part two or Conservative Investors sleep well, Fisher discusses The First Dimension of a Conservative Investment, The Second Dimension, The Third Dimension, The Fourth Dimension, More about the Fourth Dimension, Still and More about the Fourth Dimension
In Developing an Investment Philosophy the author writes about Origins of a Philosophy, The Birth of Interest, Formative Experiences, First Lessons in the School of Experience, Building the Basics, The Great Bear Market, A Chance to Do My Thing, From Disaster, Opportunity Springs Foundation Is Formed, Learning from Experience, Food Machinery as an Investment Opportunity, Zigging and Zagging, Contrary, but Correct Patience and Performance, To Every Rule, There Are Exceptions. . . But Not Many, An Experiment with Market Timing, Reaching for Price, Foregoing Opportunity The Philosophy Matures, E Pluribus Unum, History versus Opportunity Lessons from the Vintage Year, Do Few Things Well, Stay or Sell in Anticipation of Possible Market Downturns?, In and Out May Be Out of the Money, The Long Shadow of Dividends, Is the Market Efficient?, The Fallacy of the Efficient Market, The Raychem Corporation, Raychem, Dashed Expectations, and the Crash and Raychem and the Efficient Market.