Book Review: Common Stocks and Uncommon Profits — The Growth Investing Bible Every Singaporean Should Read
Book Review: Common Stocks and Uncommon Profits — The Qualitative Checklist That Stops “Growth Stories” From Blowing Up Your Portfolio (Singapore Investor Edition)
A calm, practical breakdown of Philip Fisher’s framework — so you can evaluate management, moats, and real growth (not hype) with discipline.
Key Takeaways (If You Only Have 30 Seconds)
- Most “growth losses” are qualitative failures: weak management, weak moats, weak economics — not bad luck.
- Fisher teaches the missing half of analysis: how to judge business quality beyond ratios and headlines.
- The 15-point checklist is a filter: it helps you reject 90% of “exciting” stories quickly.
- Scuttlebutt beats spreadsheet worship: talk to customers, suppliers, competitors (ethically) to learn what numbers can’t show.
- Singapore investors are story-sensitive: Fisher gives you a structured antidote to narrative-driven speculation.
- True compounders require patience: selling winners early is often the biggest self-inflicted mistake.
- Concentration is earned, not assumed: Fisher’s approach supports concentration only after deep, high-conviction work.
Book Quick Facts
- Author: Philip Fisher
- Who it’s for: Investors who want to evaluate growth businesses properly (quality, moats, management)
- Reading difficulty: Moderate (concepts are clear; applying them requires effort)
- Core theme: Qualitative research, scuttlebutt, and long-term ownership of exceptional companies
- Best for: Growth investors, global equity investors, long-term investors who want true compounders
1. What This Book Is Really About
```Most Singapore investors secretly like “growth stories” — even if we call ourselves value investors.
We love narratives like:
- technology adoption,
- international expansion,
- “next SEA”,
- “next Grab”,
- “next Shopee”,
- small caps that “could 10x”.
And yet, growth investing is where many portfolios get damaged the most.
Why?
Because investors often evaluate growth with the wrong tools. They use:
- short-term revenue headlines,
- broker narratives,
- valuation shortcuts,
- and optimism.
But the real drivers of long-term growth are qualitative:
- management competence,
- innovation culture,
- competitive moats,
- scalability,
- and unit economics that stay attractive as the company grows.
That’s the central problem Philip Fisher solves in Common Stocks and Uncommon Profits.
Warren Buffett famously said:
“I am 85% Ben Graham and 15% Phil Fisher.”
That 15% matters — because it is the difference between buying something “cheap” and buying something that can compound for decades.
If your friend says his canteen snack business will “grow big,” you shouldn’t only ask how many snacks he sold this week. You ask: Are people coming back? Is he getting better at selling? Can he handle more customers without messing up? That’s Fisher-style growth analysis.
- A structured way to judge “business quality” beyond financial ratios.
- A defence system against hype, story stocks, and narrative-driven speculation.
- A checklist that forces you to study moats, culture, and execution — where permanent loss often hides.
2. Why It Matters for Singapore Investors
```Fisher’s framework is especially useful in Singapore because our market and investor culture create very specific traps.
SGX has many mature, low-growth businesses
True long-term compounders are rare. When you do find one, the key is recognising it early and having the patience to hold through normal volatility.
Many local “growth” narratives are headline-driven
Investors often confuse:
- revenue growth with value creation,
- new announcements with durable economics,
- expansion plans with execution capability.
Fisher’s discipline forces you to validate the economics underneath the story.
We lack structured qualitative analysis tools
Many retail investors rely on broker notes, news headlines, Telegram chat tips, and “market sentiment.” Fisher gives you a professional-grade qualitative framework you can actually use.
Scuttlebutt is unusually feasible in a small ecosystem
Singapore is compact. If you invest locally, it can be easier to get real-world signals (ethically) from customers, suppliers, industry contacts, tenants, and ex-employees than in huge markets.
In short: Fisher teaches much of what “numbers-first” investors often lack — how to judge whether growth is real, durable, and investable.
```3. The Big Ideas (Explained Clearly)
```Most Amazon reviews fall into predictable camps:
- “Timeless wisdom!” True but vague — it doesn’t tell you how to apply it.
- “Outdated and too qualitative.” This usually means the reviewer wants shortcuts. The best investors still use Fisher-style qualitative thinking today.
- “The 15-point checklist is good but hard to apply.” This is the real problem: people read it, but don’t operationalise it.
This review does what most reviews don’t: it connects Fisher’s framework to specific investor pain points — and shows how to apply it in Singapore and global markets.
```4. Key Mental Models / Frameworks
```Fisher’s contribution to growth investing can be summarised into three pillars:
- the 15-point checklist,
- the “scuttlebutt” method,
- concentrated long-term ownership (earned through conviction).
Pillar 1: The 15-Point Checklist (qualitative due diligence)
This checklist is where most readers stop — but it’s where real investors begin. Each point is designed to reveal whether “growth” is investable or fragile.
At a high level, Fisher’s checklist pushes you to test:
- Market potential: is the runway large enough?
- Innovation discipline: is new product development real or cosmetic?
- Sales capability: can the company actually scale distribution?
- Margins and economics: does growth create owner value?
- People and culture: are internal relationships strong enough to sustain growth?
- Management depth: is it a one-person show?
- Integrity and controls: can you trust what you are being told?
Applied to SGX, this becomes a brutally effective filter. For example:
- Does the company operate in a growing market, or a stagnant industry dressed up with “transformation” language?
- Is “expansion into Indonesia/China/Vietnam” real execution, or just investor-relations theatre?
- Are margins durable, or will competition and costs crush them as the company scales?
- Is management building a system, or relying on one charismatic founder?
Pillar 2: Scuttlebutt (primary research)
Fisher advocates gathering information directly from:
- customers,
- suppliers,
- competitors,
- industry veterans,
- former employees.
Singapore’s small size can make scuttlebutt more feasible than most places — if you do it ethically and intelligently.
Practical local examples:
- talking to tenants (or agents) when assessing property/REIT exposures,
- speaking with procurement people (when evaluating industrial service providers),
- asking users about product reliability and service quality (when studying consumer/tech businesses),
- understanding staff turnover and culture through publicly observable signals.
- Financial statements show results; scuttlebutt helps explain causes.
- Culture, execution quality, and product usefulness often appear in reality before they appear in quarterly numbers.
- It reduces the risk of being “surprised” later by issues everyone on the ground already knew.
Pillar 3: Long-term ownership (and the discipline not to sell too early)
Fisher is very clear:
We do not buy stocks to trade. We buy businesses to own for many years.
He explains why selling early is often the biggest mistake:
- 10-baggers require time,
- compounding needs long runways,
- market downturns are normal,
- short-term volatility is not the same thing as business deterioration.
For many Singapore investors, Fisher is a corrective influence against panic-selling and premature profit-taking.
```5. How to Apply This to SGX Investing
```Here’s a practical, Singapore-friendly way to operationalise Fisher without getting overwhelmed.
Step 1: Convert the 15 points into 6 “must-pass gates”
- Runway: large market potential and expanding demand
- Moat: evidence of differentiation (brand, switching costs, ecosystem, scale)
- Execution: strong sales engine + ability to scale operations
- Economics: worthwhile margins + ability to protect/improve them
- People: culture, depth in management, low key-person risk
- Trust: integrity, controls, governance, honest communication
Step 2: Do one scuttlebutt check before you “fall in love”
Pick one angle (customer, supplier, ex-employee, competitor, industry veteran) and try to validate whether the business is respected and useful in the real world.
Before you join a CCA because it looks cool, you ask seniors: “Is it actually good? Are the coaches serious? Do people quit quickly?” That’s scuttlebutt.
Step 3: Write down “sell rules” in advance
Fisher’s philosophy is “sell rarely.” But that doesn’t mean “never sell.” It means you sell for fundamental reasons, not price movement.
Examples of fundamental sell triggers:
- management integrity breaks,
- moat deteriorates,
- unit economics structurally worsen,
- capital allocation becomes shareholder-hostile.
Step 4: Earn concentration
Concentration is powerful only when it is earned through deep understanding. Fisher encourages conviction — but only after real due diligence.
```6. What I Agree With (and What I Don’t)
```What I agree with: qualitative analysis is the missing half of growth investing. Most “growth disasters” are visible early through culture, incentives, and execution signals — not through spreadsheets.
What can be misused: some readers treat the checklist as a “story amplifier” (finding excuses to justify a hype stock). Fisher intended it as a filter — a tool to reject weak businesses, not romanticise them.
- Don’t confuse “big market” with “we will win.” Competition matters.
- Don’t treat expansion announcements as evidence of execution.
- Always connect qualitative claims back to long-term cash flow reality.
- Integrity and governance are non-negotiable — especially in small caps.
7. Who Should Read This (and Who Should Not)
```- Growth investors: this is a foundational manual.
- Intermediate investors: you may already know valuation — Fisher teaches qualitative excellence.
- Advanced investors seeking 10–20 year compounders: useful for global markets and future winners.
- Entrepreneurs and operators: the insights apply directly to building a business.
Not recommended for:
- day traders,
- momentum chasers,
- people who hate qualitative thinking,
- anyone looking for shortcuts.
8. Practical Action Steps (Checklist)
```- Build your own Fisher checklist in 6 “must-pass gates” (runway, moat, execution, economics, people, trust).
- Practise one scuttlebutt exercise on one industry (start small and stay ethical).
- Write down your “sell rules” before you buy (fundamentals, not price movement).
- Identify your top 3 “possible compounders” and track them quarterly for business progress, not stock price.
- Reduce over-diversification only after you earn conviction through research.
- Stop paying for stories. Pay for durable economics.
Fisher doesn’t give you a shortcut. He gives you a framework to identify long-term compounders — and avoid glamorous disasters.
```9. My Overall Verdict
```Common Stocks and Uncommon Profits is a qualitative discipline book disguised as a growth investing classic. If you’ve ever bought a “growth story” and later realised you didn’t truly understand the business, this book is your corrective tool.
Overall: 46/50 — a transformative manual for identifying true compounders and filtering out expensive stories.
```Get the book (Amazon)
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10. FAQ (Singapore Edition)
```Is this book useful if I’m mainly an SGX dividend investor?
Yes — because Fisher teaches how to judge management quality, moats, and durability. Even dividend investing suffers when you buy businesses with weak economics or poor integrity.
Is the 15-point checklist practical for retail investors?
It is practical when you convert it into a smaller set of “must-pass gates” and use it as a rejection tool. You don’t need perfect answers — you need strong signals and fewer blind spots.
Do I need scuttlebutt to use Fisher well?
Not always, but even one small scuttlebutt check can reveal things financial statements won’t. The goal is to reduce surprise risk — especially for smaller, less-followed companies.
Does Fisher encourage concentration?
Yes, but only after you earn conviction through deep qualitative work. Concentration without understanding is just gambling with fewer positions.
What is the single most important Fisher lesson?
Growth is only valuable when it is paired with durable economics, strong execution, and trustworthy management. Stories are cheap. Quality is rare.
```
HenryT is a Fellow Chartered Accountant (FCA) based in Singapore and the writer behind The Accounting Investor. He combines professional accounting training, corporate finance experience and personal dividend investing to help everyday investors read financial statements with confidence.
Disclaimer
This article is for education and general information only. It does not constitute investment, legal, tax or any other form of professional advice, and it is not a recommendation to buy, sell or hold any securities mentioned.
My sole intent is to help readers learn how to read financial statements and think more clearly about businesses. Please do your own research or consult a licensed financial adviser before making any investment decisions. I may or may not hold positions in the securities discussed at the time of writing and am under no obligation to update this article.
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