Introduction
This piece of the gem is dedicated to all investors whether small or large, aspiring for a steady and
promising return over a long period on their invested capital. So read his writings and try to live them out.
This is a book called a bible of investing, in the qualitative analysis it's one of the best books ever written,
it helps us analyze a business from the core.
This book is praised by one of the greatest investors of all time- Warren E. Buffet saying
"I am an eager reader of whatever Phil has to say, and I recommend him to you".
Quote to remember "People know the price of everything, but the value of none".
Top 5 lessons from Common stocks and uncommon profits.
1. Invest in companies having the management of unquestionable integrity.
The management of a company is always a greater role to play in the prosperity of the company as
well as the shareholders, a company with ethical intentions must be the supreme choice for investors
Regardless of how high the rating may be in all other aspects, however, if there is a serious question of
the lack of strong management of trusteeship for shareholders, the investor should never consider
these businesses as a part of their investments.
2. Invest in a company having products or services with sufficient market
potential to expand in its market segment so that it can make a sizable
increase in sales for several years.
A business can make a huge one time profit and further a declining sales or stationary sales curve by
just cutting costs, but not able to increase sales as there is no demand left for its products.
We need companies that have demands for its products or services so that it can increase its sales
for upcoming years and expand itself in its market segment.
3.How is Labour and personnel relations in the company.
This is a point where everyone misses out is this, people in the company needs to be valued,
if nothing is done to make ordinary employees feel they are wanted, needed, and part of the business
picture,management with this type of attitude does not provide any other reason to be invested.
4.How efficient the company is in its cost analysis and accounting controls.
Any business is not going to flourish unless it breaks down all its costs step by step and analyses,
there is no other way of knowing which products are worthy of special sales effort and promotion,
management that understands the importance of this will be far ahead of its competition.
5.Scuttlebutt.
So at last this is the most precious and most valuable piece of advice by the author,
The Scuttlebutt method, this method involves asking questions from -
- Working professionals in their respective industries, by asking questions like relative strengths and weaknesses of each company in an industry, competitors of their company in which they are currently working.
- Former employees, they can be very free in telling about the company they had worked and their competitors, why they left the company, or why they were fired. (Former employees can be misleading too as they might have some grudge for their former employer or other personal reasons.)
Review of the book -
The richest investor of all time have recommended this book every time, this book is a gem in itself,
it has worked for him, it will work for you as well.
This book is especially for investors looking forward to remaining invested whether its a bull run or a
bear run, it is not recommended for traders looking for quick returns from the market, this book can be
understood in the first reading but whenever you re-read those lines, you learn something new.
Happy investing ...
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