Hello friends, in today’s article we see COMMON STOCKS AND UNCOMMON PROFITS book introduction. In this introduction, Philip A. Fisher son write three different prefaces about the COMMON STOCKS AND UNCOMMON PROFITS book. This introduction helps you to know which parts of this book are very very much important and which other parts are the most valuable. So let’s starts with the first preface.
Introduction:-Common Stocks & Uncommon Profits
Ken Fisher wrote three prefaces, let’s starts with the first preface
What I learned from my father’s writing:-Common Stocks & Uncommon Profits
Ken fisher says, his first stock is reverse 10 baggers, which means if they buy the $100 stocks and that stocks go to $10. So that loss is 90% means 10 bagger reverse stocks.
So ken fisher say’s, ” he is not the clear or topper of the class in college and school, and not even completed his higher education from a famous university like Harvard University or nothing his special accomplishment they have to write in this preface.” (Common Stocks & Uncommon Profits)
But they got the 15 points from in COMMON STOCKS AND UNCOMMON PROFITS book, and now they manage the billions of dollars in his funds. So if they do without doing anything is special so any buddy can do better in the stock market by applying these 15 points.
Ken say’s, ” In this book 15 points directly say the how to buy the company if you want to maximum profits, and if you compare that stocks with scuttlebutt method then you know company actually what is the business and how it grows and what problem comes in this process.”
Scuttlebutt method:-Common Stocks & Uncommon Profits
In this method, you have to talk companies employees, suppliers, competitors and customers,s and also the management of the company. Why this person? because these people know they know what is going in the company and clear the image of strength and weakness.
The customer tells you about the product and why they people buy again and again, and how they know about the new products means service and marketing department information.
The supplier tells, about the raw material side or inventory of the company.
Competitors say how the company is strong and its weakness. (Common Stocks & Uncommon Profits)
So this information you get by following the scuttlebutt method, so this information you found on the main street, not on the wall street or Dalal street, So this information is good and trustworthy.
If you want to collect information from wall street, then you face the dot com bubble candlesticks so you get the information from the main street is safe and trustworthy than the wall street candlesticks charts and financial reports of accounting. (Common Stocks & Uncommon Profits)
Read more: The Intelligent investor book summary
If you ask customers and suppliers, you get the truth of the company.
Scuttlebutt technique is very helpful to you to stay away from those companies that have the good on paper but actually not in the real situation, so this types of company stocks get in Ponzi scheme, then they lose the 90-95% stocks value.
So these 15 points help you to define which types of company you found, is outstanding company or Ponzi scheme company. (Common Stocks & Uncommon Profits)
Philip A. Fisher believes in holding stock forever, and ken believes in holding stocks for 5 to 10 years and growth stocks, value stocks, large-cap stocks, small-cap stocks, all types of stocks you can use this method because this method helps you to find out which is a quality company, whatever they company in any industry.
Ken says the Scuttlebutt chapter is about 3 pages but they told this is the best part of the book and very important parts
One of the best questions of Philip A. Fisher is not in this book, key say, ” What are you doing that your competitors aren’t doing yet. “
So that means if the company is not doing anything means they lead the other company in the same industry and other companies follow that company. (Common Stocks & Uncommon Profits)
Ken says, 15 points of company quality and scuttlebutt method is the diamond of this book. so and another topic is also very much important like 10 don’t for investors.
So ken suggests you have to read this book as much as time while you analyze a company.
The second preface is all about the Philip A. fisher family, you can read, buying this book, by click on the image, so let’s
Starts Preface by Philip A. Fisher :
In this preface, the author gives the shorts story of writing this book. Before writing this book, the author runs the investment counseling business at the age of 26, they run this for 10 years, and after that
in 1941 he got a job in the army air force. They work there for 3.5 years. so in this time period, they reviewed their investment actions. So from that review, some good points are born that are different from the financial community analysis rules. (Common Stocks & Uncommon Profits)
After the end war they use these 15 points and they got a good return for 12-13 years, and they want to keep the printed record, so they write this book.
The author says, beyond that 15 principles other two important things matter for investment success.
- Need patience for making a big profit.
- The stock market is deceptive and follows the crowd, the results are not good.
so from the next article, you get the chapters of this book.
Read more: One up On-wall Street book summary