Common Stocks and Uncommon Profits is a book written by Philip A. Fischer in 1958. The book provides a comprehensive guide to investing in the stock market, with a focus on long-term investment strategies. The book is divided into three parts, with each part covering different aspects of investing in the stock market. The book is considered a classic in the field of investment and has been widely read by investors and financial analysts alike.
Part 1: The Investment Philosophy
In this part, Fischer lays out his investment philosophy, which is based on the idea that investing in stocks is a long-term game. He argues that investors should focus on buying stocks that are undervalued and have strong fundamentals. Fischer also emphasizes the importance of diversification, saying that investors should spread their money across different industries and sectors to reduce risk.
Part 2: The Selection of Stocks
In this part, Fischer provides a detailed analysis of how to select stocks. He suggests looking for companies with strong financials, good management, and a competitive advantage. Fischer also emphasizes the importance of analyzing a company’s price-to-earnings ratio, which he believes is a key indicator of a stock’s value.
Part 3: The Management of Stocks
In this part, Fischer provides guidance on how to manage stocks once they have been selected. He suggests using stop-loss orders to limit losses and suggests taking profits when a stock has performed well. Fischer also emphasizes the importance of patience and discipline, saying that investors should avoid making emotional decisions and stick to their long-term investment strategy.
Common Stocks and Uncommon Profits is a timeless classic that provides valuable insights into investing in the stock market. Fischer’s investment philosophy is based on the idea that investing in stocks is a long-term game, and he provides a detailed analysis of how to select and manage stocks. The book is a must-read for anyone interested in investing in the stock market and provides a solid foundation for building a successful long-term investment strategy.