Common Stocks and Uncommon Profits Review: Philip Fisher's Growth Investing Classic

The Growth Investing Classic Warren Buffett Calls Essential

Philip A. Fisher's Common Stocks and Uncommon Profits (1958) is the growth investing classic. Warren Buffett famously said he's "85% Graham and 15% Fisher" — but that 15% shaped how Buffett actually invests (high-quality businesses at fair prices, not just cheap stocks). The book's enduring influence makes it essential alongside The Intelligent Investor.

Short answer: Essential for active investors who want to go beyond cheap-stock value investing. Fisher's "scuttlebutt method" and "15-point checklist" give frameworks for identifying superior businesses. Shorter than many investing classics (~300 pages). Rewards careful reading.

Core Concepts

Scuttlebutt method: Don't just read annual reports. Talk to:

• The company's customers (are they loyal?)
• The company's competitors (what do they say?)
• The company's ex-employees (what was the culture?)
• The company's suppliers (is the company well-run?)

This method was revolutionary — Fisher built his reputation by doing ground-level research most Wall Street analysts didn't.

15-Point Checklist: Criteria to evaluate a business before investing:

1. Does the company have enough market potential for several years of sales growth?
2. Do management's long-range plans extend beyond current products?
3. How effective are research and development?
4. Are the sales organization above average?
5. Does profit margin exceed competition?
6. What actions maintain/improve margins?
7. Labor relations quality
8. Executive relations quality
9. Depth of management
10. Accounting controls + cost analysis
11. Industry-specific leading indicators
12. Short vs long profit outlook
13. Future dilution risk
14. Frank management communications
15. Management integrity

Takes time to answer all 15 for any stock. Fisher's point: that's the commitment required for serious growth investing.

Who Should Read

Strong fit:

• Active stock pickers
• Value investors transitioning toward quality-growth
• Buffett/Munger followers
• Those tired of screen-based investing
• Readers wanting alternative to pure Graham

Less ideal:

• Passive index investors
• Day traders
• Those seeking quick-fix tactics
• Students wanting mathematical frameworks

Compared to Other Investment Classics

Graham + Fisher = Buffett foundation.

Pros and Cons

Pros: Warren Buffett's foundational influence, scuttlebutt method remains useful, 15-point checklist is practical, shorter than many classics, timeless principles, growth investing balance to Graham value

Cons: 1958 publication — some examples dated, scuttlebutt requires significant time investment, not applicable to passive investing, some modern-era businesses don't fit the framework well

FAQ

Should I read Graham or Fisher first? Graham is more foundational. Fisher complements after Graham.

Do I need to read both editions? Original (1958) + updated (with Ken Fisher's commentary) both work.

Will scuttlebutt method work for me? Requires time. Most retail investors use it selectively.

Is 15-point checklist still current? Core concepts yes; specific wording feels 1958.

Which Fisher son is Ken Fisher? Ken Fisher wrote "Debunkery" and "The Only Three Questions That Still Count" — Philip's son, also successful investor.

Bottom Line

Common Stocks and Uncommon Profits is the growth investing classic. Warren Buffett's explicit endorsement is significant. For active investors expanding beyond pure value investing, essential.

Our rating: 4.7/5 — Docked for 1958-era examples and scuttlebutt time commitment. Within growth investing literature, foundational.