Post by Value Investing Academy

💰Key Learnings from Common Stocks & Uncommon Profits! 💰 ✅ Core idea ✅ Fisher argues that great long-term investing comes from buying exceptional businesses, not merely cheap stocks. 🤩 The goal is to understand the business more deeply than what financial statements alone can show 🤩 Philip Fisher’s 15-point checklist can be summarised as: 1) Market potential • Does the company have products or services with enough market potential to support a meaningful rise in sales for years? 2) Ongoing innovation • Does management have the determination to keep developing new products or improving existing ones when current growth starts maturing? 3) Research and development effectiveness • How effective is the company’s R&D relative to its size? 4) Strong sales organisation • Does the company have an above-average sales organisation? 5) Attractive profit margin • Does the business have a worthwhile profit margin? 6) Margin improvement efforts • What is the company doing to maintain or improve its profit margins? 7) Labour and personnel relations • Does the company have outstanding labour and personnel relations? 8 ) Executive relations • Does it have outstanding relationships among executives? 9) Depth of management • Does the company have management depth, so it is not dependent on just one or two people? 10) Cost controls and accounting discipline • How good are the company’s cost analysis and accounting controls? 11) Competitive advantages not obvious in the numbers • Are there other important business traits that give clues about how exceptional the company may be compared with competitors? 12) Long-range outlook on profits • Does management think in terms of long-range profits rather than short-term earnings only? 13) Future financing and dilution risk • Will future growth require so much equity financing that existing shareholders’ gains may be diluted? 14) Management candour • Does management talk openly with investors when things are going well and also when problems arise? 15) Management integrity • Does the company have management of unquestionable integrity? A great business with weak leaders can fail, while excellent managers can create enormous long-term value. • Buy-and-hold mindset: He believes investors should hold outstanding companies for a very long time, as long as the original business quality remains intact. ➡️ View on diversification ⬅️ He prefers focused investing in a smaller number of truly outstanding companies rather than excessive diversification. 💰Big takeaway 💰 Fisher’s message is: Buy a wonderful company with strong management and long-term growth, then let time do the compounding. Learn more at www.viamasterclass.com. At ViA, We Care to Make You a Better Investor! #GrowviaViA #ViAHuatMePls #ValueInvestingAcademy #valueinvesting #Stocks