Common Stocks and Uncommon Profits and Other Writings

 Preface 
3 3 
first groping toward organizing this book.Then I began thinking of the 
many people, most of them owners of far smaller funds than those 
belonging to the handful of individuals it is my business to serve, who 
have come to me over the years and asked how they as small investors 
could get started off on the right path. 
I thought of the difficulties of the army of small investors who have 
unintentionally picked up all sorts of ideas and investment notions that 
can prove expensive over a period of years, possibly because they had 
never been exposed to the challenge of more fundamental concepts. 
Finally I thought of the many discussions I have had with another group 
also vitally interested in these matters, although from a different stand-
point. These are the corporate presidents, financial vice presidents and 
treasurers of publicly owned companies, many of whom show a deep 
interest in learning as much as possible about these matters. 
I concluded there was need for a book of this sort. I decided such 
a book would have an informal presentation in which I would try to 
address you, the reader, in the first person. I would use much the same 
language and many of the same examples and analogies that I have
employed in presenting the same concepts to those whose funds I 
manage. I hope my frankness, at times my bluntness, will not cause 
offense. I particularly hope that you will conclude the merit of the
ideas I present may outweigh my defects as a writer. 
San Mateo, California
September 1957

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1
Clues from the Past
3 4
1
Clues from the Past
Y
ou have some money in the bank.You decide you would like to 
buy some common stock. You may have reached this decision 
because you desire to have more income than you would if you 
used these funds in other ways. You may have reached it because you 
want to grow with America. Possibly you think of earlier years when 
Henry Ford was starting the Ford Motor Company or Andrew Mellon 
was building up the Aluminum Company of America, and you wonder 
if you could not discover some young enterprise which might today lay 
the groundwork for a great fortune for you, too. Just as likely you are 
more afraid than hopeful and want to have a nest egg against a rainy day.
Consequently, after hearing more and more about inflation, you desire 
something which will be safe and yet protected from further shrinkage
in the buying power of the dollar.
Probably your real motives are a mixture of a number of these 
things, influenced somewhat by knowing a neighbor who has made 
some money in the market and, possibly, by receiving a pamphlet in the 
mail explaining just why Midwestern Pumpernickel is now a bargain.A 
single basic motive lies behind all this, however. For one reason or 
another, through one method or another, you buy common stocks in 
order to make money. 
Therefore, it seems logical that before even thinking of buying any 
common stock the first step is to see how money has been most suc- 
cessfully made in the past. Even a casual glance at American stock mar-
ket history will show that two very different methods have been used to 
amass spectacular fortunes. In the nineteenth century and in the early 

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