Common Stocks and Uncommon Profits

Common Stocks and Uncommon Profits – Philip A. Fisher

1. Full Citation

Fisher, P.A. (1958, revised 2003) Common Stocks and Uncommon Profits and Other Writings. Hoboken, NJ: Wiley.

2. Introduction

Common Stocks and Uncommon Profits by Philip A. Fisher is a cornerstone of growth investing, complementing Benjamin Graham’s value-oriented philosophy. Fisher’s work shifts the focus from balance-sheet analysis to qualitative insights about management, innovation, and competitive advantage. Published in 1958, the book pioneered the idea that long-term investment success depends on understanding the character, vision, and execution capability of a company’s leadership. Fisher’s style, which blends investigative due diligence with business foresight, helped shape modern equity research and remains vital for investors interested in innovation-led companies.

3. Author Background and Credentials

Philip A. Fisher was an influential American investor and founder of Fisher & Co., a money management firm he ran for over 60 years. Revered by Warren Buffett and other industry legends, Fisher was among the first to systematise qualitative analysis, advocating for deep research into a company’s people and policies. His teachings remain foundational for growth investing and stock selection strategies in sectors like technology, pharmaceuticals, and consumer goods.

4. Summary of Contents

The book is structured around Fisher’s 15 points to look for in a common stock, which form the core of his investment philosophy:

  1. Scalability and Growth Potential
  2. Effective Research and Development
  3. Sales Organisation Quality
  4. Profit Margin Sustainability
  5. Strong Cost Analysis
  6. Workforce Relations
  7. Outstanding Executive Leadership
  8. Personnel Development Programs
  9. Depth of Management
  10. Long-Term Strategy over Short-Term Profit
  11. Responsiveness to Change
  12. Product Durability and Market Position
  13. Business Forecasting Accuracy
  14. Industry Comparability
  15. Integrity of Management

Other key themes include:

  • “Scuttlebutt” Method: Fisher recommends gathering informal insights from suppliers, competitors, and employees to understand a company’s true value.
  • Long-Term Focus: Emphasises holding high-quality stocks for extended periods rather than trading frequently.
  • Avoiding Over-Diversification: Advocates for focused portfolios of well-researched companies.

The revised edition includes Fisher’s other writings, such as Conservative Investors Sleep Well and Developing an Investment Philosophy.

5. Critical Evaluation

a. Coherence and Argumentation

Fisher presents a cohesive, investor-centric argument for prioritising qualitative data. His “15-point checklist” is both structured and flexible, allowing adaptation across industries.

b. Originality and Intellectual Contribution

Fisher’s emphasis on managerial quality, innovation, and product leadership was ahead of its time. His “scuttlebutt” method was revolutionary in encouraging primary research and human intelligence in stock analysis.

c. Evidence, Sources, and Method

Unlike Graham, Fisher does not rely on statistical models but instead draws from real-world investing experience. His method is investigative rather than formulaic, focusing on long-term case observations rather than academic studies.

d. Style and Accessibility

Fisher’s tone is conversational and reflective. Though less technical than Graham’s work, his content is rich with strategic insight, best suited for those with a basic understanding of markets.

e. Limitations and Critiques

Some may find the book lacking in concrete valuation tools or numerical analysis. Fisher’s approach requires extensive research and patience, which may be impractical for casual investors or those without access to insider information.

6. Comparative Context

Compared with:

  • The Intelligent Investor – Focuses on balance sheet and market irrationality
  • One Up on Wall Street – Similar in using personal knowledge, but Fisher is more systematic
  • The Warren Buffett Way – Buffett blends Fisher’s qualitative methods with Graham’s valuation model

Fisher uniquely elevates management quality and industry dynamics as central to investing.

7. Thematic or Disciplinary Relevance

Fisher’s work is highly relevant to:

  • Growth equity strategy
  • Strategic business analysis
  • Behavioural finance
  • Technology and innovation-focused investing

It is often referenced in venture capital, tech investing, and fund management courses.

8. Reflection or Practical Application

Many investors credit Fisher with changing how they approach research, moving beyond numbers to assess vision, leadership, and innovation. His principles guide those seeking competitive moats and sustainable business models in dynamic industries.

9. Conclusion

Common Stocks and Uncommon Profits offers timeless guidance for investors seeking to understand businesses from the inside out. Its focus on qualitative, strategic factors is especially suited for today’s innovation-driven markets, making Fisher’s legacy both relevant and enduring.

Recommended for: Growth investors, equity analysts, tech sector investors, fund managers, and anyone focused on qualitative due diligence.

10. Other Works by the Same Author

  • Paths to Wealth Through Common Stocks
  • Conservative Investors Sleep Well
  • Developing an Investment Philosophy

11. Similar Books by Other Authors

  • Peter Lynch – One Up On Wall Street
  • Warren Buffett – The Essays of Warren Buffett
  • Thomas Rowe Price – Growth Stock Investing
  • William O’Neil – How to Make Money in Stocks

12. References (only if external works are cited)

  • Fisher, P.A. (2003) Common Stocks and Uncommon Profits and Other Writings
  • Buffett, W. (1984) The Superinvestors of Graham-and-Doddsville
  • Lynch, P. (1989) One Up on Wall Street
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