Autumn is back-to-school season, a time to hunker down in a library or your personal study with a good book and caffeinated beverage of your choice. Of course, you're no longer in college, but hopefully the spirit of a lifelong learner still dwells within. If so, I recommend that you seize this time to engage a serious work in the investment arena.
Our Senior Editor Ken Silber has a terrific piece in this issue on "The Investment Classics" — the works of Phil Fisher (Common Stocks and Uncommon Profits), Graham and Dodd (Security Analysis) and of course the book Graham penned solo (The Intelligent Investor.)
Ever wonder what makes a book a classic? There are a lot of brilliant people with great ideas, but only few whose works endure. Classic works seem to have an almost tangible quality to them, as if the author is taking you by the hand and gently instructing you, or giving you a friendly whack prompting you to finally "get it".
Phil Fisher had a knack for putting common sense into words. People often fail to realize that common sense isn't so common. Until someone like Fisher comes along and says — "I don't want a lot of good investments; I want a few outstanding ones" — the idea remains imprecisely defined; there are whole prospectuses dedicated to communicating this simple concept. Fisher's works are filled with valuable nuggets of wisdom.
Benjamin Graham's animating concern was helping people make investment decisions objectively. He, along with David Dodd, defined principles of fundamental analysis, so that stocks could be quantitatively compared based on say, ratios of price-to-book value rather than on the more speculative "research" based on tips or management representations. His genius lay in the systematic applicability of his ideas.
