Common Stock Uncommon Profit

"Common Stock Uncommon Profit" by Philip Fisher. To me, this is the best stock investment book I ever read. I had benefited from this book by applying his philosophy and method in Bursa Malaysia. However, I will not provide any comment on this book here.

What I intend to share here are stock investing strategy and stock selection that in my opinion will result in uncommon profit.

1st is buying growth stock that its profit going to increase substantially for years to come, and hold this stock for years to enjoy the grow of business profit. As business profit jump, share price sooner or later will follow. Then there is the likelihood that investors will value it differently that resulted in change of appraisal. Once change of appraisal is happening this stock will fetch a higher PE valuation. Time is good friend for this type of stock. As time passed, share prices this company will outperform the market as a whole then resulted  above average profit or uncommon profit. I like this approach very much. This is the method suggested by Philip Fisher 80 years ago, as today this method still intact. My favourite, Hartalega, is this kind of stock that I hold for years, and will hold for years to come.

2nd is buying good or above average business or stock during bad time or market correction. This method will caused you buy at lower entry price for good stocks. As, Benjamin Graham taught us the stock market is higher volatile and fluctuated, we must mentally and financially prepared to face it. Instead of ride through the up and down, which we are impossible to avoid, why not we are prepared to capitalize on it. Stock market tend to have a correction every 3-5 years and major correction or crisis every 8-10 years. I can not fight the market force, however I am prepared to capitalize on it. To be greedy when other is fearful. I don't mind other call me speculator, to me it is the uncommon profit that count. I practised philosophy of Benjamin Graham.

3rd is buying good new business or new product that will increase profit of a company substantially. The risk of this method is on the high side, but the reward can be very very high. Bursa Malaysia is short of this kind of company not like other countries. The best example I can think of locally is Jobstreet. If you vested since it listed, you are sitting on good return. Off course in US we have this Apple or Google.

4th is buying above average old economy industries. But you have to be quite sure that this type of company still able to achieve above average profit for years to come. Or this particular stock is undervalue or overlook by investors.