Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! | Phil Town

Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! | Phil Town | A Good Book For Starters

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	Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! Phil Town Three Rivers Press, 2007 - 336 pages average customer review:based on 152 reviews view larger image
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highly recommended

An Impressive Distillation of the Buffett/Graham Investing Approach

If you are a value investor in the style of Buffett/Graham, I have no doubt you will glean a lot of practical insight from this book.

Rule #1 stands out among most of the popular value investing books I have read in that it provides a very practical program for applying value investing principles to stock analysis and selection. Too often I find that the plethora of value investing books on the market, while often useful, read like encyclopaedias whose information is difficult to distill.

For example, how many times have you heard that you should invest in what you know? But what does that mean? It is very easy to fool yourself into thinking you know a company. Rule #1 doesn't let you make that mistake so easily.

After covering the concept of 'moats' (that Buffett uses regularly), the author gets into the hard numbers. He does a great job of forcing the reader to look for consistent growth and returns, and to not overpay for quality (a common mistake among well-intentioned value investors). Again, this theory is found in most value investing books; Rule #1 however goes further, showing you where to get these numbers for free, and how to start thinking about growth and value without pulling out a calculator at every turn (think of the 'Rule of 72').

Other highlights include a step-by-step process near the end of the book in which the author takes a company through the grinder and decides on a price to pay for its consistent growth and potential.

If you are a numbers person and are already using discount models to price stock, this book will pull you into a more organic method of looking at value in which you will be able to size up a company's stock price in your head before running the numbers into a discount model. For example, the author explains how historic Book Value Per Share growth is the best representation of EPS growth in the future. Once you track a historic p/e yield, and use a 15% discount, you effectively have everything you need to get a price per share on your stock.

Finally, the author covers 'fundamentals' of technical analysis when you are convinced that your well-researched stock is worth owning. Again, the author describes why he uses this sort of technical analysis.

If you read this book and apply the principles, you will automatically start filtering companies before even thinking of investing in them. And your investing confidence will improve dramatically.

I highly recommend this book.

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A Good Book For Starters

I ordered the book after watching Phil Town on CNBC "The Millionaire Inside". It is a good source for knowledge if you are a beginner, as I was. Although far from being an expert, I have spent the last year doing further reading on the methods of value investing. Yes, Phil's book is good, but there is so much more a person needs to look at when researching a company. Some examples: Ben Graham (Warren Buffett's Professor-mentor) strived for a P/E of around 10. Phil doesn't seem to care how high the P/E ratio is. He also never mentions price/sales, current or quick ratios, net profit margin. And he takes pride in his statement "I will not own this business for 10 minutes unless I will own it for 10 years", yet he tells us in another chapter to dart in and out of the investments using technical analysis indicators.

Again, I will reiterate the fact that this book is very good as a starting point. It's easy to understand without leaving you buried under an avalanche of calculations. After that one needs to read "buffettology" or other books based on Warren Buffett and Benjamin Graham. Then I would suggest "paper trading" (fake trading) by setting up a watch list as MSN finance. Do this for 6 months before even thinking about investing a nickel.

I recently purchased this book as a gift for my sister and brother-inlaw. They only invest through their 401k mutual (moron) fund. Phil Town has a way of explaining the stock market and avoidance of mutual funds like no other. He makes it fun. My sister would never attempt to learn the valuation methods involved in researching an investment if not for a book like this. For this I give this book 5 stars.

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The more the riper

This is an excellent, well researched and well referenced book. The more I read it, the more benefit I gain from it. The book's exposition of the big five as the primary driver of share values is very very good. When one has a small portfolio, he can crunch every number conceivable. But when one has 10,000 shares, he needs a clear shortcut. This book provides us with such a clear shortcut.

Great educational tool!

I am finding this book to be a great addition to my investment education. The content is written in a clear, concise manner.

Great service and product

I purchased Rule #1 by Phil Town. Amazon was great. The product shipped in 1 day and the book is fantastic! I will definitely use Amazon again.

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