Common Stocks and Uncommon Profits

One line: Philip Fisher's 1958 growth-investing classic — David Rosenthal's carve-out pick at the close of the Berkshire trilogy, offered as the counterpoint to Buffett-style value investing.

Overview

Fisher, whom David calls "the father of growth investing," lived in the Bay Area in San Francisco. Published in 1958, the book is, in David's telling, "the counterpoints to the Buffett philosophy and the value investing tribe" that this episode has spent three hours on. One passage David singles out is Fisher's treatment of the corporate-R&D paradox: R&D's value can't be priced on the balance sheet and its cost may be high and hard to judge — but the cost of not doing it is even higher. David credits Fisher with effectively previewing tech-company dynamics decades early.

Why it's worth reading

David names this his related carve-out at the close of the episode: "A really great book. I highly recommend it." He admits he hadn't finished it yet — "I haven't finished the book yet, I'm still in the middle of it, but I am riveted" — but recommends it anyway. The kicker: wrapping up, David realizes the book was originally recommended to him by Ho Nam of Altos Ventures, the investor Ben had just quoted for arguably the best one-line summary of Buffett anyone has written. David's reaction: "My gosh. He's everywhere."

Where it comes from

[acquired-berkshire-3-en] (the carve-outs segment closing the episode): David frames his two carve-outs — "One very related and the other very unrelated except for my joke at the beginning of the episode." This book is the related one. In his words: "The related episode is a book, Phil Fisher's Common Stocks and Uncommon Profits, a classic. Really the counterpoints to the Buffett philosophy and the value investing tribe. Phil is the father of growth investing and this book was published in 1958 and Phil lived in the Bay Area here in San Francisco."