common stocks and uncommon profits by philip a fisher

Some companies for example will forgo near term profits to look after their customers, partners and/or suppliers during unusual or difficult circumstances to improve relationships and profits in the long run. Does the company take a long-range view to profits? Unsurprisngly, companies are better placed to succeed in new industries that are related to existing business than in totally unrelated industries. However, Additionally, Fisher believes that new engineering and research must have some business relationship with existing operations. Managers need to recognise whe existing opportunities have reached its potential and when new developments need to be explored.

While the first point is a matter of fact to Fisher, this second point is a matter of management attitude. Does management have the determination to continue development of products and processes to increase total sales when the existing growth potential have been exhausted? Similarly, Fisher recommends we focus on the quality of growth, looking across several years of growth as opposed to year-to-year comparisons. The quality of management, industry trends and business cycles are important considerations here. Does the company have significant sales growth potential for at least the next several years?įisher advises readers to consider both the growth potential and its likelihood of realisation. Effective research, sales and accountingĪttractive growth prospects 1.In this post, we will review Fisher’s fifteen points, which we categorise into five themes: While much of the fifteen points are self-explanatory, it has great utility as a checklist for what to buy and what to avoid. According to Fisher, these are fifteen fundamental business features that companies cannot fake. In his book, Common Stocks and Uncommon Profits, investor Phil Fisher identified fifteen points that characterise an attractive investment opportunity. Investors can avoid disasters such as Enron, Tyco and WorldCom if they focus on Main Street’s verification of each business’ strengths and not the gossip of Wall Street Opinion. Phil Fisher’s fifteen points and investment checklist

Common stocks and uncommon profits by philip a fisher