Paths to Wealth through Common Stocks contains one original concept after another, each designed to greatly improve the results of those who self-manage their investments — while helping those who rely on professional investment advice select the right advisor for their needs.
PATHS TO WEALTH THROUGH COMMON STOCKS was my father’s second book, and was written very much as a follow-on to his 1958 classic, Common Stocks and Uncommon Profits.
That first book became a basic text at the Stanford Graduate School of Business for decades, and changed the way countless readers thought of investing— including Warren Buffett, who said it pulled him away from his straight Ben Graham approach and set him on his own approach ever after.
Although this book never had the sales, impact, or longevity of the first book, it’s important and useful for any serious market student for two reasons.
In Part 1 , he starts with issue number one of the day: inflation. You’ll find his analysis here both deficient and prescient all at the same time. It’s deficient because he doesn’t have in his arsenal the full array of monetarism that Milton Friedman would soon develop and popularize.
In Part 2, his description of Pioneer Metals Corporation is another perfect example of what we all know but never think about. One person, one idea, and the next thing you know, a boring, profitless company and useless stock is transformed in just a few years into an innovative world beater.
In my mind, Part 3 is not my father’s best work. There is little that is prescient in any regard, as near as I can tell. Since its original publication, so much has been written on how to pick a money manager that perhaps the chapter’s most important concept is how truly primitive the process was in 1 960.
But, then, Part 4 is stunning. Had CEOs of the day heeded his advice on mergers, the mess with 1 960s conglomerates might have been avoided altogether. He drove nail after nail into the coffin of stupid mergers.
Part 5 is of interest partly for historical study and partly as a standard tool for business analysis. He focuses on then-contemporary industry analysis.
- Adjusting to Key Influences of the 1960’s
- How the Greatest Increases in Stock Values Come About
- You and Where Your Investment Business Must Go
- Trivia but not Entirely
- Major Growth Industries of the 1960’s