Super-Stocks

As rich in investment war stories as it is in knowledge


One of the most successful investing books ever published, Super Stocks showed investors how to use innovative techniques and fundamental analysis for valuing stocks and predicting future profit margins.

You'll gain valuable insight into Fisher's original thinkin for valuing stocks and predicting future profit margins. A pioneer in the use of the Price Sales Ratio-a powerful analytical tool-Fisher regales readers with instructive tales of the businesses he invested in and profited from.

Super Stocks gives a historical perspective on how Fisher successfully researched companies and stocks—who he saw and what he asked—to get a better read on profitable returns.

How to pick stock market rejects with uncommon appreciation potential. Fisher, a West Coast money manager, advises investors to concentrate on seldom-used price/sales, as opposed to widely-followed price/earnings, ratios.

He also counsels concentrating on relatively unseasoned growth issues changing hands for less than one times per-share sales. (When the P/S multiple gets above three, it's generally time to sell.) In the case of larger, more mature companies, he reduces these benchmarks by sizable margins. Fisher favors P/S screening because he believes that corporate profits are a result, not a cause, and calculations can be highly arbitrary. Revenues, generally less volatile, are a more accurate indication of an enterprise's vitality - and viability.

But Fisher doesn't rest his analysis there: investors should also evaluate such conventional yardsticks as debt/equity ratios, liquidity, and R & D expenditures relative to market capitalization before taking a position in any stock. He has a particular penchant for high fliers that have been brought to earth - though it may take up to five years, he warns, for workout values to be realized. Apart from the recent success stories that dot the text, we're reminded of IBM's anything-but-Super Stock performance until after WW II. Fisher's by-the-numbers system is not for neophytes, but its fresh perspectives should prove attractive to thoughtful veterans.

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