Common Stocks and Uncommon Profits

Introduction

Common Stocks and Uncommon Profits represents the distilled investment wisdom of Philip Fisher.

Although his concepts were first introduced in 1958 - over 60 years ago - they remain highly relevant in today’s financial landscape.
In particular, Fisher’s "Scuttlebutt" method and his famous "15 Points" continue to be essential tools for investors seeking to identify high-growth companies with long-term potential.

Clues from the Past

Whether driven by the need to combat inflation or informed by word-of-mouth and research, many investors turn to common stocks to protect their purchasing power from the shrinking value of the dollar.

Historically, two distinct methods have been used to amass spectacular fortunes:

Value Investing: This approach emphasizes buying stocks during market downturns and selling them during prosperous times, placing a heavy reliance on a margin of safety.
Growth Investing (The Fisher Approach): This method focuses on identifying truly outstanding companies and holding them through the fluctuations of a gyrating market. While potentially more profitable, this approach requires the skill to distinguish the few companies with exceptional potential from the vast majority that may only achieve moderate success or end in complete failure.

A generation ago, the heads of large corporations were typically members of the founding or owning families who viewed the company as a personal possession.

In contrast, today’s top corporate management is professionalized. Modern leaders engage in continuous self-analysis and a never-ending search for improvement.
They frequently seek outside expertise and consult with specialists to gain a competitive edge and ensure long-term sustainability in the market.
Furthermore, there is a newfound emphasis on corporate research and engineering as a means to harvest growing profits for stakeholders. While the costs of research and development (R&D) are high and the results are never guaranteed, the alternative is far worse: a company’s failure to keep pace with technology and changing times is almost always disastrous.

History shows that the greatest investment rewards go to those who - through good luck or good sense - identify the rare company capable of growing its sales and profits far beyond its industry average.

Regardless of a company’s size or age, the deciding factors are a management team with the determination to achieve significant growth and the operational ability to execute those plans.
A further clue from the past is that this growth is often driven by a company's ability to organize scientific research effectively. By doing so, they can bring to market economically viable and strategically interrelated product lines.
Crucially, a great company’s preoccupation with long-range planning does not distract it from day-to-day excellence; it remains vigilant in performing ordinary business tasks outstandingly well.

What "Scuttlebutt" Can Do

A logical - yet often impractical - approach to identifying high-potential companies would be to hire a management expert to audit every internal subdivision, from executive personnel to production, sale and research.

However, this is impossible for the average investor.
Most individuals with that level of expertise are already occupied in high-paying management roles, and even if they were not, no growth company would grant an outsider the level of access required to make such an informed decision.

Instead, the Scuttlebutt Method provides a practical alternative for the prospective investor to gain an "insider’s view" through external sources:

Competitors: Ask executives at five competing companies in the same industry to describe the strengths and weaknesses of the other four. They are often the first to know who is winning the market.
Vendors and Customers: Speak with suppliers and clients to understand the true nature of the company’s business relationships and product quality.
Research Scientists: Experts in universities, government or competing firms can provide data on the technical viability of a company's research.
Trade Associations: Executives in these groups often have "insider" perspectives on industry trends that are not yet public.
Former Employees: While they offer a unique inside view, their testimony must be cross-checked carefully; a disgruntled former employee may provide biased information due to a personal grievance.

In the case of truly outstanding companies, the information gathered through Scuttlebutt becomes so crystal clear that even a moderately experienced investor can identify the winners.

This sets the stage for the final step: contacting company officers directly to fill in the remaining gaps in the investment thesis.

What to Buy: The Fifteen Points to Look for in a Common Stock

Does the company have products or services with sufficient market potential to make a sizable increase in sales possible for at least several years?

While speculators and bargain hunters may find one-time profits in companies with stagnant or declining sales - often through cost-cutting measures or temporary "special situations" - these do not offer the opportunity for the greatest possible gains.
Philip Fisher argues that an investor should look for companies that are "fortunate because they are able" rather than those that are merely "fortunate because they are able to capitalize on good times". The former creates its own growth through superior products and vision, whereas the latter simply rides the wave of a strong economy and struggles when the cycle turns.

Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?

Companies that possess significant growth prospects for the next few years due to high demand for existing products may offer a "nice one-time profit".
However, if they lack the policies or plans to develop new revenue streams beyond their current success, they are unlikely to provide the consistent, decade-long gains that are the surest route to financial success.
To achieve this sustained growth, a company must move beyond its initial success; it is at this critical juncture that scientific research and development (R&D) and engineering must enter the picture.

How effective are the company's research and development efforts in relation to its size?

The raw dollar amount spent on R&D is less important than its efficiency. Close coordination between research teams and those responsible for production and sales is vital. Without this synergy, new products are often poorly designed for cost-effective manufacturing or lack the necessary market appeal. Such inefficient research leaves a company vulnerable to more disciplined competitors.
Furthermore, top management must have a fundamental understanding of commercial research. Without this insight, they may make the mistake of aggressively expanding development projects in good years and sharply curtailing them during downturns.

Does the company have an above-average sales organization?

In a competitive market, the "making of a sale" is the most fundamental activity of any business. Without a consistent flow of revenue, survival is impossible.
While many investors focus solely on production or research, a company's success is also tied to the effectiveness of its sales, advertising, and distribution networks.
For steady, long-term growth, a strong sales arm is vital.

Does the company have a worthwhile profit margin?

From an investor's standpoint, sales growth is only valuable if it ultimately leads to increased profits. Philip Fisher asserts that the greatest long-range investment returns are rarely, if ever, obtained by investing in marginal companies (those with very low profit margins).
However, there is one important exception: companies where a low profit margin is being deliberately engineered to accelerate growth - such as through aggressive reinvestment in R&D or market expansion. Aside from this specific case, investors seeking maximum gains should avoid low-margin or marginal companies.

What is the company doing to maintain or improve profit margins?

In the modern economy, profit margins are under constant threat. Wages and salaries tend to rise annually, and these rising labour costs inevitably lead to price increases for raw materials and supplies.
While a company can raise its own prices to offset these costs, this is often only a temporary solution. Once a company can no longer pass costs on to the consumer without losing market share, its margins will begin to shrink.
Therefore, an outstanding company must employ ingenious means to protect its profitability. This includes designing new equipment to automate processes, reducing waste, and constantly reviewing internal procedures and methodologies to increase overall efficiency.

Does the company have outstanding labour and personnel relations?

The negative impact of frequent and prolonged strikes is obvious to anyone performing even a cursory review of corporate financial statements.
Good personnel relations significantly increase productivity per worker and save the company considerable costs associated with high employee turnover and the constant need to train new staff.
Several key indicators of a healthy workplace culture include above-average wages, effective grievance resolution and employee feeling of belonging.

Does the company have outstanding executive relations?

Internal friction or resentment can create a toxic environment where executive talent either leaves the firm or fails to perform to its maximum ability.
Several key measures that indicate healthy executive relations include merit-based promotions (not by favouritism or seniority), regular salary adjustments to be at least in line with industry standards, and seeking outside help only when absolute necessary for specialized skills or a fresh perspective.

Does the company have depth to its management?

Companies worthy of investment are those destined for continued growth. However, every growing company eventually reaches a size where a few key individuals can no longer manage every detail. To capitalize on further opportunities, a company must develop executive talent in depth.
This requires the effective delegation of authority; no matter how brilliant one or two founders may be, they cannot scale a business indefinitely without empowering a capable middle-management layer.
A key indicator of management quality is the willingness to listen to employees - even when their suggestions include adverse criticism of current management practices.

How good are the company's cost analysis and accounting controls?

For businesses with a vast array of products or services, management needs sophisticated cost analysis to identify which items require special sales effort and promotion, and - more importantly - which are operating at a loss.
Without these controls, a company is essentially "flying blind," unable to allocate capital and labour to the areas that provide the highest return on investment.

Are there other aspects of the business, somewhat peculiar to the industry involved, which will give the investor important clues as to how outstanding the company may be in relation to its competition?

The factors that make a company outstanding vary by industry.
For large, established companies, a strong patent position is usually a source of additional strength rather than its primary foundation. While patents can protect certain product lines from intense competition and allow for wider profit margins, they are often temporary.
For long-term leadership, large companies rely far more on "intangible" strengths than on legal filings, such as manufacturing know-how, service and sales organizations, customer goodwill, and knowledge of customer problems.

Does the company have a short-range or long-range outlook in regards to profit?

Some companies manage their affairs to extract the maximum possible profit in the immediate quarter. In contrast, outstanding companies may deliberately curtail short-term profits to build "goodwill," knowing this will lead to significantly greater overall returns over many years.
This distinction is most visible in how a company treats its vendors and customers:

A short-sighted company will always squeeze suppliers for the "sharpest" possible deal. A long-term-oriented company may occasionally pay above the contract price to a vendor facing unexpected expenses. They do this to ensure a dependable supply chain, guaranteeing they have access to high-quality materials even when the market tightens and supplies become scarce.
A great company will go to extra trouble and expense to help a regular customer during an unexpected crisis. While this may result in lower profits on that specific transaction, it fosters a level of customer loyalty that generates far greater profits over the life of the relationship.

In the foreseeable future will the growth of the company require sufficient equity financing so that the larger number of shares then outstanding will largely cancel the existing stockholders' benefit from this anticipated growth?

An intelligent investor should not buy common stocks simply because they are cheap; they should only invest if there is a promise of significant long-term gain. One of the greatest threats to this gain is dilution.
Even if a company grows rapidly, if it must constantly issue new shares of stock to fund that growth, the original stockholders' proportional ownership is diminished.
What truly matters is whether the company’s current cash reserves, combined with its borrowing capacity, are sufficient to fund its growth prospects for the next several years without the need for excessive new equity offerings.

Does the management talk freely to investors about its affairs when things are going well but "clam up" when troubles and disappointments occur?

An investor should exclude any company that withholds or attempts to hide bad news.
While every business will eventually face unanticipated difficulties, the manner in which management responds is a critical test of their character.
Management teams that hide problems often do so because they are unable to solve them, have become panicky, or lack an adequate sense of responsibility to their shareholders.
In contrast, an outstanding management team is candid about setbacks and provides a clear plan for how they intend to rectify the situation.

Does the company have a management of unquestionable integrity?

Investors must ensure management feels a strong sense of trusteeship toward their shareholders.
A major red flag is when those in control find ways to divert corporate assets for personal benefit. such as placing unqualified relatives on the payroll at inflated salaries, management owning properties or businesses that they then sell or lease back to the corporation at above-market rates, and using corporate funds for excessive personal luxuries that do not benefit the business.

What to Buy: Apply This to Your Own Needs

Because the time and mental effort devoted to financial education is often limited, the typical investor frequently falls prey to the half-truths and misconceptions that the general public has accumulated about successful investing.

One of the most widespread inaccuracies is the idea that an investment expert is an introverted, bookish individual with a purely accounting-minded approach - someone who sits in isolation poring over balance sheets and trade statistics.

While mathematical calculations can help identify an apparent bargain or flag upcoming business trouble, the "15 Points" demonstrate that successful investing is not determined by cloistered math alone.

Growth stocks tend to perform so much better than simple "undervalued" stocks that they can show gains of 100% or more each decade.
Apart from capital appreciation, given enough time, these growth stocks often provide superior dividend returns compared to traditional "income" stocks.

Because successful growth investing requires qualitative research - chatting with industry contacts and seeking expert help - the investor must dedicate time to finding the right opportunities.

If you choose to work with a financial advisor, you must first understand their basic concept of financial management.
Do they prefer high-grade bonds, risky marginal companies, or are they simply "guessing" the market? Ensure their philosophy aligns with your long-term goals.

Common stock investment should only be done with true surplus funds.

This does not mean using every dollar left over after monthly expenses.
Before entering the market, an investor should have an emergency fund for illness or unexpected contingencies.
Protected savings for specific future purposes, such as a child's college education, should never be risked in the stock market.

For the majority of small investors, the decision on whether to prioritize immediate income (dividends) or long-term growth is ultimately a matter of personal choice.

When to Buy

Once an investor has identified an outstanding stock, the decision of when to buy depends on their individual objectives and temperament.

While the right stocks - if held long enough - will almost always produce a handsome profit, achieving maximum returns requires some consideration of timing.

Many sophisticated investors attempt to time their purchases based on forecasts of interest rates and general business activity.

If they see "dark clouds" on the economic horizon, they often postpone or cancel their purchases.

However, given the current state of economic knowledge, accurately forecasting future business trends is practically impossible.

Every year, leading authorities present opposing, yet equally convincing, arguments for both optimistic and pessimistic outcomes.
Philip Fisher believes that the "collective intelligence" wasted on trying to guess the business cycle would produce far more spectacular results if it were harnessed toward analyzing specific companies.

Rather than looking at the macro-economy, the proper timing for buying lies in the specific nature of the growth stock itself.

The best time to buy is often when a company has already spent heavily on R&D for a new product, but before the profits from that product have started to show up on the financial statements.
At this stage, the market is often sceptical or impatient, allowing the observant investor to buy in before the "spectacular" growth begins.

Beyond the individual company's performance, five powerful external forces that can temporarily depress share prices, creating buying opportunities:

The financial community’s constant preoccupation with the danger of a potential downswing in the business cycle.
Trend of interest rate
The overall governmental attitude toward investment and private enterprise
The long-range trend to more and more inflation
New inventions and techniques threaten to displace established industries.

When to Sell and When Not to

While there are valid personal reasons to sell a stock - such as buying a home or financing a family business - Philip Fisher identifies only three strategic reasons to sell a stock that was originally selected using his 15 Points:

When a mistake has been made in the original purchase and it becomes increasingly clear that the factual background of the particular company is significantly less favourable than original believed.

Correcting a mistake requires emotional self-control and the honesty to admit that your original thesis was wrong.

A company may no longer qualify under the 15 Points due to the passage of time.

This often happens because a new set of executives fails to meet the high standards of their predecessors or abandons the policies that made the company successful.
The company no longer has the prospect of expanding its markets as it once did.

The long-range outlook for another company appeared even better.

This is rare, as truly outstanding investment opportunities are difficult to find.

Philip Fisher argues against three common reasons investors use to justify selling:

Fear of a Bear Market

Theoretically, an investor could sell and wait for a lower price, but in practice, no one knows when a decline will end.
If the company is truly outstanding, the next bull market will likely push the stock to a new peak well above its previous highs.

Overvaluation (High P/E ratio)

Outstanding stocks should sell at a higher price-to-earnings ratio than stagnant companies.
If the growth rate is strong, the company’s earnings may quadruple over the next decade, making today's "high" price look like a bargain in hindsight.

The "It's Gone Up Too Much" Fallacy

Some sell simply because a stock has risen, assuming its potential is "used up".
Philip Fisher counters that if the business is still improving, the price increase is just a reflection of growing value. Why trade a proven winner for an unproven new prospect?

Conclusion: If the job has been correctly when a common stock is purchased, the time to sell it is - almost never.

The Hullabaloo About Dividends

There is a significant misconception regarding the benefit of dividends.

Many investors view a dividend increase as "favourable" and a cut as "disastrous".
However, Philip Fisher argues that the true value of earnings depends entirely on whether they are better off in the company’s hands or the shareholder's pocket.

Philip Fisher identifies specific cases where shareholders gain nothing when a company keeps its profits instead of paying dividends:

Management piles up cash far beyond any prospective need, simply for a personal sense of security.
Substandard management uses retained earnings to enlarge an inefficient operation rather than improving it.
Capital is spent on "assets" that are required just to stay competitive (like an expensive air conditioning system) but do not actually increase sales volume or profit.
When depreciation allowances are insufficient, and retained earnings must be used just to replace old equipment at higher current prices.

On the other hand, for an outstanding company, every dollar reinvested into a new plant, a new product line, or cost-saving equipment is worth far more than a dollar paid out as a dividend.

Dividends are taxed as immediate income. If the company reinvests the money instead, the stock price rises, and the investor’s wealth grows through capital appreciation, which is often taxed at a lower rate or deferred.
High dividend-paying stocks often perform poorly price-wise because they are "sacrificing" growth opportunities to please income-seeking investors. Eventually, the business shrinks, and the "safe" dividend gets cut anyway.

The ideal dividend policy

Yong and rapidly growing companies should pay no dividends at all, reinvesting every cent into rapid growth.
Once the business is established, mature companies may pay out 25-40% of its profits.
Shareholders hate unpredictable income. An outstanding company should set a dividend rate it can maintain even during a downturn or the appearance of additional opportunities for growth. It should only be increased when management is certain the new rate is sustainable for the long term. Only in the gravest of emergencies should such dividends be lowered.

Don'ts for Investors

Don't buy into promotional companies.

Investors are often tempted by "promotional" companies - startups or young firms that appear to be on the verge of developing a revolutionary product or exploiting an untapped market.
The allure is the chance to "get in on the ground floor" during an Initial Public Offering (Offering).
However, this is often a trap. The difference between a "promotional" company and an "established" growth company is the ability to perform a reliable evaluation:

For established companies, you have real data on production efficiency, sales organization, cost accounting, and how the management team handles stress.
Promotional companies can only be evaluated based on blueprints and guesswork. There is no track record to prove that the management can actually manufacture the product at a profit or sell it effectively in a competitive market.

Don't ignore a good stock just because it is traded "over the counter".

Philip Fisher warns against the prejudice that a company must be listed on a major, prestigious exchange (like the NYSE or, in Malaysia, the Main Market) to be considered a high-quality investment. Historically, some of the most spectacular growth opportunities were found in smaller, less "famous" markets (like Nasdaq or in Malaysia, the ACE Market) before they graduated to the big boards.
However, investment should generally be confined to stocks that can be sold easily if a personal or financial need for cash arises. Plus, small-cap stocks are often traded in smaller quantities. This creates a risk where an investor might find it difficult to sell a large position quickly without significantly depressing the share price.

Don't buy a stock just because you like the "tone" of its annual report.

The wording, format, and general narrative of a company’s annual report can easily create a false impression for stockholders. Glossy photographs and vibrant charts are marketing tools; they do not necessarily reflect a capable, close-knit management team working with genuine harmony and enthusiasm.
Investors must remember that these reports are rarely balanced. They seldom provide a complete or honest discussion of the real problems and structural difficulties facing the business.
On the other hand, an annual report that fails to provide proper information on matters of genuine significance - or one that glosses over critical challenges - is a major red flag. A company that is not transparent with its investors is unlikely to be a successful long-term investment.

Don't assume that the high price at which a stock may be selling in relation to earnings is necessarily an indication that further growth in those earnings has largely been already discounted in the price.

Investors often see a stock selling at a high price-to-earnings (P/E) ratio and assume that all future growth has already been "discounted" (priced in). However, a high P/E ratio is frequently a reflection of a company's intrinsic quality and the market's recognition of its superior growth potential.
If a company is deliberately and consistently developing new sources of earning power - through R&D and market expansion - its P/E ratio may remain high for years. If the earnings grow at a rate of 20% to 30% annually, a stock that looks expensive today will actually prove to be a bargain in the long run. The real danger is not a high P/E ratio, but a high P/E ratio in a company that fails to maintain its growth momentum.

Don't quibble over eights and quarters.

In an attempt to save a small amount of money on the entry price, an investor might miss the opportunity to invest in a brilliant company altogether. Missing a massive long-term gain to save a negligible amount on the initial purchase is a poor trade-off.
For small investors, if a stock seems the right one and the price is reasonably attractive at current levels, the best course of action is to buy "at the market".
However, the situation is different for large-scale or institutional investors. When purchasing a massive quantity of shares, a single large buy order can easily drive up the share price. These investors must be more calculated in their execution to avoid market impact.

Don't overstress diversification.

While the dangers of "putting all your eggs in one basket" are frequently discussed, spreading your investments across too many baskets makes close monitoring impossible. In the vast majority of cases, an investor only has a high degree of knowledge about a small percentage of truly attractive stocks.
Philip Fisher suggests a more concentrated approach for a balanced growth portfolio:

A minimum of five large, well-entrenched, and properly selected growth stocks.
A small number of "mid-way" companies - those that are past the startup phase but still carry a higher degree of risk than established giants.

Don't be afraid of buying on a war scare.

History shows that during a war scare or the onset of an actual war, the stock market almost always plunges sharply as panic sets in. However, these declines are typically temporary, and markets tend to rebound sharply as the initial shock subsides.
By the conclusion of a war, most stocks are selling at levels vastly higher than they were before the conflict was even anticipated.
In summary, selling out of fear during a geopolitical crisis is usually a mistake. For the long-term investor, a "war scare" is often a rare opportunity to buy outstanding companies at a significant discount.

Don't forget your Gilbert and Sullivan (i.e. what does not matter).

Fisher observes that many investors have a strange obsession with historical price ranges. They demand to see a table showing the highest and lowest prices of a stock over the past five or ten years. They then perform a sort of "mental mumbo-jumbo," picking a "nice round figure" between those highs and lows as the price they are willing to pay.
This is completely illogical for several reasons:

The price from four years ago has no real relationship to the value of the company today. In those four years, the company may have developed a host of able new executives and profitable products, making it intrinsically worth four times as much today. Conversely, management could have deteriorated, diluting the stock's value to a fraction of its former self.
The only price that matters is the one based on a current appraisal of the situation. You are buying the company's future, not its history.

Similarly, historical per-share earnings and analysis reports of past performance are of limited value. While they can be helpful as auxiliary tools for specific specialized purposes, they should never be the major factor in deciding whether a stock is attractive.

Don't fail to consider time as well as price in buying a true growth stock.

There are circumstances where a stock with high earning potential remains at a high price because of its past success. An investor might refuse to buy, fearing the price will drop toward its "intrinsic value" in the near future. However, by waiting for a correction that may never happen, the investor risks missing a lifetime investment opportunity.
Philip Fisher suggests that if you have identified a truly outstanding company, it is often better to prioritize time in the market over "timing the market." A practical workaround for the hesitant investor is to set a specific future date to make the purchase regardless of the current price.

Don't follow the crowd.

Stock prices are moved by two very different types of changes:

Real-world events such as a change in net income, new management, a breakthrough invention, or shifts in interest rates and tax laws. These factors change the actual value of a company.
Changes in how the public appraises that value. Even if the fundamental basis of a company remains identical, the price-to-earnings (P/E) ratio can fluctuate wildly based on the "delusions" or sentiments of the crowd.

At times, the financial community may suddenly favour a specific industry (like chemicals or pharmaceuticals), viewing old challenges with new optimism. At other times, they may panic over risks that the industry has survived for decades.
The wise investor must evaluate the prevailing "narrative" of the market and determine which trends are fundamental and likely to persist, and which are merely fads of the moment.

How I Go About Finding A Growth Stock

Finding investments that lead to spectacular market gains requires significant time, skill and alertness. Philip Fisher’s process follows a disciplined two-stage outline, where the quality of each decision has a tremendous impact on the final financial results.

Stage 1: Finding Leads and Initial Screening

With thousands of stocks across dozens of industries, an investor must narrow the field.

A fertile source of leads is observing companies favoured by outstanding investment professionals with proven track records.
Typical brokerage bulletins available to the general public are rarely useful. They often repeat common knowledge and carry the risk of inaccuracies.

Once a lead is identified, Philip Fisher performs a rapid review of the balance sheet. He examines the capitalization, financial position, total sales by product lines, the competitive landscape, profit margins, R&D spending, and any "non-recurring" (abnormal) costs from prior years.

Stage 2: The Deep Dive (Scuttlebutt)

If a company passes the initial scan, the "Scuttlebutt" phase begins. This involves gathering data from a diverse group of people, including key customers and suppliers, direct competitors, former employees or scientists in related fields.

Philip Fisher is clear that if you are unable to gather sufficient information through these channels, abandon the investigation and move on to something else.

It is his firm belief that in almost any field, nothing is worth doing unless it is worth doing right. This is especially true in the world of investing. When selecting growth stocks, the rewards for making the correct decision are so massive, and the penalties for poor judgment are so severe, that it is difficult to justify making an investment based on merely superficial knowledge.

Only after gathering enough external information to form an informed opinion should an investor approach the management team. This meeting serves as the final evaluation to confirm the or challenge the findings from the Scuttlebutt phase.

Summary

While Benjamin Graham’s The Intelligent Investor and Howard Marks’s The Most Important Thing emphasize value investing - the practice of purchasing stocks at a bargain price with a significant margin of safety - Philip Fisher’s Common Stocks and Uncommon Profits complements this strategy by focusing on quality and growth.

In Philip Fisher’s investment philosophy, the emphasis shifts from the price paid to the quality of the business. He suggests that if you invest in a company that fulfills his "15 Points" criteria, the ideal holding period may be "almost forever".
To him, the "margin of safety" was not a low price; it was superior management, research and development, and a dominant market position.

In fact, Warren Buffett famously stated, "I'm 15% Fisher and 85% Benjamin Graham" (though his style shifted more toward Fisher over time).

This blend explains his evolution from Benjamin Graham’s quantitative focus on undervalued assets to Philip Fisher’s qualitative focus on strong management, research and development, and sustainable competitive advantages.
In his later partnership with Charlie Munger, he began buying "wonderful companies at fair prices" rather than "fair companies at wonderful prices".

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