"Common Stocks and Uncommon Profits" by Philip Fisher is a classic investment book that offers timeless principles and strategies for investing in the stock market. Phil was a pioneer in our field and his working journey was inspirational in many ways.

Book Summary:

• Long-Term Perspective:
  "Common Stocks and Uncommon Profits" advocates for a long-term perspective in stock investing. Philip Fisher advises investors to focus on companies with strong growth potential, intending to hold stocks indefinitely as long as the company's fundamentals remain robust.
  
• Scuttlebutt Method:
  Fisher introduces the "scuttlebutt" approach, emphasising thorough research by gathering information from various sources, including customers, suppliers, competitors, and company employees. This comprehensive understanding aids investors in making informed decisions about a company's operations and reputation.
  
• Qualitative Analysis:
  The book places significant emphasis on qualitative analysis, urging investors to understand a company's management, industry position, and competitive advantages. Fisher highlights the importance of assessing the quality and integrity of a company's leadership for long-term success. Many do this in both public and private markets.
  
• So-called 'Growth Investing':
  Fisher is known for his focus on 'growth stocks', recommending investment in companies with strong growth potential. Rather than asset-based valuation he looked at strong sales and earnings growth, technological leadership, and effective research and development. He was forward-looking decades before forward-looking became a thing.
  
• Margin of Safety:
  Acknowledging inherent risks in investments, Fisher advises building a margin of safety by being selective and cautious. The importance of avoiding overpaying for stocks is emphasised, aligning with the principle that no investment is entirely without risk.
  

Lessons Learnt:

• Patience and Long-Term Commitment:
  Fisher's emphasis on holding stocks indefinitely underscores the lesson of patience and long-term commitment. Successful investing involves riding through market fluctuations while staying focused on a company's enduring potential. Real businesses that have quality products and services also have long-term time frames.
  
• Thorough Research Pays Off:
  The scuttlebutt method teaches the importance of thorough research in making informed investment decisions. Gathering diverse perspectives from various sources provides a comprehensive understanding of a company's operations and reputation.
  
• Leadership Matters:
  Qualitative analysis stresses the significance of assessing a company's management. Fisher's belief in capable leadership as essential for long-term success highlights the lesson that strong, trustworthy leadership can significantly impact a company's performance.
  
• Focus on Growth (that adds value):
  Fisher's focus on growth stocks and the criteria for identifying them teaches the lesson that prioritising companies with above-average growth prospects can lead to robust and successful investments. We have more about Growth vs. Value in our thoughts section.
  
• Risk Management and Margin of Safety:
  Fisher's acknowledgement of investment risks underscores the importance of risk management. Building a margin of safety by avoiding overpaying for stocks is a crucial lesson, emphasising the need for cautious and selective investment choices.

"Common Stocks and Uncommon Profits" by Philip Fisher is a foundational text on investment philosophy. His importance of a margin of safety continues to be relevant for contemporary investors seeking to build a successful investment portfolios. These lessons are timeless. We certainly enjoyed the read, we hope you do too.