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Common Stocks and Common Sense: The Strategies, Analyses, Decisions, and Emotions of a Particularly Successful Value Investor
Deep insight and candid discussion from one of Wall Street's best investorsCommon Stocks and Common Sense provides detailed insight into common stock investing, using a case-study approach based on real-world investments. Author Edgar Wachenheim is the 28-year CEO of Greenhaven Associates, boasting an average annual portfolio comparable to Warren Buffet's. In this book, he shares his knowledge and experiences by providing detailed analyses of actual investments made by himself and other investors. The discussion covers the entire investment process, including the softer, human side, with candid insight into the joys and frustrations, intensities and pressures, and risks and uncertainties. The unique emphasis on behavioral economics and real-world cases set this book apart from the herd--but it's Wachenheim himself and his deeply-examined perspective that elevates the book beyond a mere investing guide.
Between 1990 and 2014, a typical portfolio managed by Wachenheim enjoyed an average annual return in excess of 18%, achieved using relatively conservative stocks and no financial leverage. As a proponent of evidence and example, his analysis of real cases serve as a valuable education for anyone looking to improve their own investment practices.
Understand investment through the lens of a Wall Street leader
Dig into the details of real-world common stock investing
Learn how to invest creatively and minimize risk
Go beyond theory to study strategy on a case-by-case basis
Investment principles and strategies are easy to find--entire libraries have been written about theories and methods and what 'should' happen. But this book goes beyond the typical guide to show you how these ideas are applied in the real world--and what actually happened. Investors seeking real insight, real expertise, and a proven track record will find Common Stocks and Common Sense a uniquely useful resource.
Between 1990 and 2014, a typical portfolio managed by Wachenheim enjoyed an average annual return in excess of 18%, achieved using relatively conservative stocks and no financial leverage. As a proponent of evidence and example, his analysis of real cases serve as a valuable education for anyone looking to improve their own investment practices.
Understand investment through the lens of a Wall Street leader
Dig into the details of real-world common stock investing
Learn how to invest creatively and minimize risk
Go beyond theory to study strategy on a case-by-case basis
Investment principles and strategies are easy to find--entire libraries have been written about theories and methods and what 'should' happen. But this book goes beyond the typical guide to show you how these ideas are applied in the real world--and what actually happened. Investors seeking real insight, real expertise, and a proven track record will find Common Stocks and Common Sense a uniquely useful resource.
197 pages, Hardcover
First published January 1, 2016
60 people are currently reading
660 people want to read
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Displaying 1 - 30 of 45 reviews
January 16, 2018
Better than expected. Though the analyses at some cases were simplistic, they still represent the core theses behind each case. Valuation work is also simplified, but in these cases the pitches were so fat that once he understood the qualitative aspect that differed from the market consensus, he was on to a great investment. Bits and bites on how to access revenue growth of the comp were very useful.
May 1, 2020
Great book for people interested in investing in stocks. It was written by Edgar Wachenheim, a fund manager with great track record (18-19% over a relatively long 24-25 years period).
The book covers briefly the author's background, what made him motivated to manage money as well as why or how he has been developed independent thinking since young.
The book also covers the emotion side of investing in stocks and why certain psychology/emotional trait is more suited to investing. Other than those, the book covers 12 case studies, or 12 investments by the author, 11 successful and one failed one (AIG).
I find the book is both part knowledge/wisdom sharing, part marketing for his fund. That said, this is a much better way to market a fund than pitching to investors.
His style of investing is also slightly different from me. He buys decent business when the market under-appreciates good development and sells when those good development is mostly priced in.
The book covers briefly the author's background, what made him motivated to manage money as well as why or how he has been developed independent thinking since young.
The book also covers the emotion side of investing in stocks and why certain psychology/emotional trait is more suited to investing. Other than those, the book covers 12 case studies, or 12 investments by the author, 11 successful and one failed one (AIG).
I find the book is both part knowledge/wisdom sharing, part marketing for his fund. That said, this is a much better way to market a fund than pitching to investors.
His style of investing is also slightly different from me. He buys decent business when the market under-appreciates good development and sells when those good development is mostly priced in.
October 13, 2017
Close to being a 5-star. Unusually many good insights and practical advice for an investment book.
The book is written by an investor that has done the real thing with large amounts, so his words are not merely opinions like a lot of investment writing but has actually worked very well in practice.
Besides general investment process discussions there are 12 real case studies of investments Edgar made while running Greenhaven Associates. While I'm sure they were carefully selected (11 out of 12 worked out very well), the author does have a very stellar record of a 19% CAGR over 25 years and is currently managing ~$6 billion at Greenhaven Associates (also, Glenn Greenberg worked for him before starting Brave Warrior). I think including some more cases of failed investments would have made the book even better.
On the negative side, there was one quite appalling moment when the author called out two of his investors that left him during the 2000 IT boom by name and then went on to belittle them. The author was trying to make a point about being independent and not following the herd, but this could obviously have been done in a much better way. Praise by name, criticize by category.
All in all, there was a lot of good stuff in here. If you are a professional equity investor, you will like it.
The book is written by an investor that has done the real thing with large amounts, so his words are not merely opinions like a lot of investment writing but has actually worked very well in practice.
Besides general investment process discussions there are 12 real case studies of investments Edgar made while running Greenhaven Associates. While I'm sure they were carefully selected (11 out of 12 worked out very well), the author does have a very stellar record of a 19% CAGR over 25 years and is currently managing ~$6 billion at Greenhaven Associates (also, Glenn Greenberg worked for him before starting Brave Warrior). I think including some more cases of failed investments would have made the book even better.
On the negative side, there was one quite appalling moment when the author called out two of his investors that left him during the 2000 IT boom by name and then went on to belittle them. The author was trying to make a point about being independent and not following the herd, but this could obviously have been done in a much better way. Praise by name, criticize by category.
All in all, there was a lot of good stuff in here. If you are a professional equity investor, you will like it.
February 8, 2021
The book navigates across the thinkings ot Ed Wachenheim and it does address some important aspects such as watching the history of some markets and not just the business. It is interesting how he takes decisions against the current and becomes success and somehow when written it seems so logical. Chapter highlights for me are the Boeing, Lowe's, Southwest Airlines and the best part was the final chapter which makes emphasis on the lessons learned across the book. Full of financial terms but still understandable for someone with a bit of experience.
July 12, 2025
Mycket skryt (”när jag köper tavlor på auktion på Sotheby’s brukar mina vänner säga…”, etc.) och brist på självinsikt, en del bra modeller att lära sig av. Onekligen en fantastisk investerare, det självgoda hade dock kunnat utelämnas.
July 24, 2020
very clear explanation of why the author would land on an investment decision why he wouldn't. a good book to read for understanding the fundamentals of inventing
February 25, 2021
simple & straightforward
July 18, 2025
No matter how good or bad the book is simply after reading the first few chapters, it's pretty clear how full of himself, proud, and not humble the author is. For that reason, I give the entire book just one star. I will read the rest, keeping that in mind unless the author can prove otherwise. If you're fine with that, then go ahead and read. Otherwise, there are better books out there.
PS : After reading another chapter, which the author has wasted my time by writing how he spends his day ( not much use to anyone ), I have decided to return the book. It's definitely not worth reading or wasting time over . DO NOT GET FOOLED BY THE PAID REVIEWS HERE. Read something better instead.
PS : After reading another chapter, which the author has wasted my time by writing how he spends his day ( not much use to anyone ), I have decided to return the book. It's definitely not worth reading or wasting time over . DO NOT GET FOOLED BY THE PAID REVIEWS HERE. Read something better instead.
January 17, 2018
A book written by investment manager Edgar Wachenheim, who has achieved admirable investment results (19% annualized return for 25 years). The book is a collection of case studies of how and why he bought and sold certain stocks.
Wachenheim’s investment philosophy is to buy undervalued stocks but with improving fundamentals in a growth industry. He found ideas that have very attractive valuation, and then conduct research, uses his networks to talk to people who know the companies and then he has an investment horizon of at least 2 years. Quite classic value investing.
The case studies are investing and honest. Some ideas are discovered quite randomly, and some ideas are generated through research on other holdings. He identified some industry trend that has not been widely recognized by the market and capitalize on short term pessimism of stocks.
If he could give some failed investment cases, it would be better. I also don’t like he mentions sell side reports a lot, as if sell-side consensus are driving the misconception of stocks.
Wachenheim’s investment philosophy is to buy undervalued stocks but with improving fundamentals in a growth industry. He found ideas that have very attractive valuation, and then conduct research, uses his networks to talk to people who know the companies and then he has an investment horizon of at least 2 years. Quite classic value investing.
The case studies are investing and honest. Some ideas are discovered quite randomly, and some ideas are generated through research on other holdings. He identified some industry trend that has not been widely recognized by the market and capitalize on short term pessimism of stocks.
If he could give some failed investment cases, it would be better. I also don’t like he mentions sell side reports a lot, as if sell-side consensus are driving the misconception of stocks.
September 27, 2023
In the end pretty good book with describing author's investment approach to the companies he had bought. At the beggining the book is more like an autobiography but in the stock analysis, it is good.
Insights:
- Liquidity helps protect us from permanent losses.
- Most “experts” and the media were predicting that the OPEC cartel would hold and that prices would recover, but there is an old expression that one should not pay attention to the noise in the market, but rather to the price of the fish.
- Be wary of companies that largely have been “put together” through recent acquisitions. Normally, acquisitions are made through an auction process, with the acquiring company agreeing to pay the highest price. I agree with Warren Buffett that the smartest side to take in a bidding war is the losing side. After purchasing a painting at auction at Christie’s or Sotheby’s, I often am congratulated by my neighbors in the audience. My reaction is: why should anybody be congratulated for paying a price that no one else was willing to pay?
Insights:
- Liquidity helps protect us from permanent losses.
- Most “experts” and the media were predicting that the OPEC cartel would hold and that prices would recover, but there is an old expression that one should not pay attention to the noise in the market, but rather to the price of the fish.
- Be wary of companies that largely have been “put together” through recent acquisitions. Normally, acquisitions are made through an auction process, with the acquiring company agreeing to pay the highest price. I agree with Warren Buffett that the smartest side to take in a bidding war is the losing side. After purchasing a painting at auction at Christie’s or Sotheby’s, I often am congratulated by my neighbors in the audience. My reaction is: why should anybody be congratulated for paying a price that no one else was willing to pay?
July 17, 2023
A book of case studies highlighting value investing strategies. Really excellent look into what value investing is in modern times and how you can take advantage of the market. Annoyingly, Wachenheim makes it all look too easy. Each case has probably too much background on each business and too little financial discussion for my liking, but it makes it very approachable for novice investors. I wish there were charts included (like Lynch's books) and perhaps some financial tables as many times he projects earnings, but you don't know how they differ from consensus. His approach to valuation is easy and replicable. And, in true Harvard Business School form, his case studies simultaneously explore the broader investment management business as well as the economy. A really instructive book that helped my crystalize some thoughts / beliefs.
August 2, 2021
1. Dont loose perspective(after long bull markets)
2. Beware of projecting last or present trends info the future.
3. Beware of seeking confirmation bias
4. Intensively research stocks and industries( Quality and Quantity)
5. You cant predict the stock market
6.Management
7. Projections of Management
8.Wary of «put together» Acquisitions
9. Supply and demand
10. Wary of stock recomendations of others
11. neglect the Media
12. Numbers and models can be missleading
13. Emotions
14. Simplicity
15.trees do not grow to heavens
16. Market analysis(earnings)
17. risk
18. risk averse
19. change your mind
20. Long term
21. fully invested-cash is king
22. Optimistic
23. strukture portfolio
2. Beware of projecting last or present trends info the future.
3. Beware of seeking confirmation bias
4. Intensively research stocks and industries( Quality and Quantity)
5. You cant predict the stock market
6.Management
7. Projections of Management
8.Wary of «put together» Acquisitions
9. Supply and demand
10. Wary of stock recomendations of others
11. neglect the Media
12. Numbers and models can be missleading
13. Emotions
14. Simplicity
15.trees do not grow to heavens
16. Market analysis(earnings)
17. risk
18. risk averse
19. change your mind
20. Long term
21. fully invested-cash is king
22. Optimistic
23. strukture portfolio
August 27, 2025
4.25 out of 5 to be exact. His approach makes common sense, i really like the way he shows how he came up with some useful insights (math, public sources, common sense, asking stakeholders). These insights were so strong that the valuation is way to simple, but it still worked.
For the drawbacks, the book can be much shorter and I hope the author can introduce more failed case. I also believe that valuation should be discussed deeper.
KEY: You should dig deep to find insights and beat the market, they are slow to adapt to new insights.
For the drawbacks, the book can be much shorter and I hope the author can introduce more failed case. I also believe that valuation should be discussed deeper.
KEY: You should dig deep to find insights and beat the market, they are slow to adapt to new insights.
June 9, 2022
I discovered this book by reading the memoir of Alan Patricof, who worked for Greenhaven’s predecessor company. It provides insight into the life and thinking of a value investor in common stocks. At the same time, it indirectly begs the question of whether there might be more productive avenues to deploy the methods of deep value investing than in stocks that are subject to a variety of idiosyncratic and macroeconomic factors well beyond the control or predictive ability of the investor.
November 21, 2025
Worth reading. It was interesting to read the perspective of a successful fund manager. Main takeaways for me were:
1. Value can be found "anywhere," even in large caps.
2. Valuation methods are probably more simple than you would imagine, and are probably less important than qualitative factors once you already have a significant margin of safety.
3. How advantageous it is to have access to CEOs, CFOs, board members, etc.
1. Value can be found "anywhere," even in large caps.
2. Valuation methods are probably more simple than you would imagine, and are probably less important than qualitative factors once you already have a significant margin of safety.
3. How advantageous it is to have access to CEOs, CFOs, board members, etc.
September 13, 2021
Salah satu buku saham terbaik di lemari saya
berisi kisah2 nyata sebuah Investment Company dari
-Kriteria pemilihan sahamnya
-Pengambilan keputusanny
-Psikologi yang dibangun
Meskipun proses analisanya di buat simple dan tidak terlalu dalam, tapi buku ini sangat menarik dan seru untuk dibaca. Sehingga membuat kita memandang sesuatu dr pola pikir seorang Investment Company.
berisi kisah2 nyata sebuah Investment Company dari
-Kriteria pemilihan sahamnya
-Pengambilan keputusanny
-Psikologi yang dibangun
Meskipun proses analisanya di buat simple dan tidak terlalu dalam, tapi buku ini sangat menarik dan seru untuk dibaca. Sehingga membuat kita memandang sesuatu dr pola pikir seorang Investment Company.
September 16, 2020
A bit boring book if you ask me, since he does analysis of companies only. would have been more interesting if all the chapters were like the last chapter. neverthless, i did learn from this book. thank you edgar wachenheim.
April 5, 2024
Sort of a nerdy investing book, but I loved it! I especially enjoyed the last chapter: a letter to a young investor. Lots of wisdom.
I'll be reading Ed Wachenheim's quarterly letters going forward
I'll be reading Ed Wachenheim's quarterly letters going forward
October 26, 2017
Excellent book with very good case studies..Although authors approach to valuation is something I don't agree with but his research on each of 13 stocks discussed in this book is beyond excellence
April 30, 2018
it was a ok book to read..good part doesnt take much time to read...but dont think you learn much from the book. its just lots of successful examples and more of gut feel investment
November 8, 2018
This book helps the reader understand the thought process and methodology of the author and thus gives the reader a sense of work,research which is required to buy a stock.
February 5, 2019
Practical with a lot of examples rather than a value investment book full of theories.
November 21, 2020
Excellent book on value investing using a case study approach
January 29, 2021
Great book for those who want to learn by example. Takes you through the author's thought process. I wish there were more examples of bad investments to learn from.
April 5, 2021
Would highly recommend this book - learnings based on case study methodology. This is a rare book, which actually discusses the thought process behind the author's investments.
April 7, 2022
Brilliant
Must read for every serious as well as non serious investors.
Written in plain simple English for anyone to understand.
Must read for every serious as well as non serious investors.
Written in plain simple English for anyone to understand.
August 23, 2022
Simple read with good structure. Ed lays out his background, philosophy and then proceeds with a bunch of case studies spanning a few decades; analyses were simple and straight to the point.
December 19, 2022
Remarkably simple thoughts on investing. Thought it was fantastic.
March 24, 2024
Excellent book with excellent advice. Worth rereading.
December 2, 2024
well written and interesting. guy is ungodly arrogant.
Displaying 1 - 30 of 45 reviews