Phil Town’s Rule Number 1 investment book is yet another classic that deserves a spot on every investor’s bookshelf.  Rule #1 of investing, if you are not aware is “Don’t lose money”.  Rule #2 of investing is also “Don’t lose money”, and Rule #3 is “Re-read the first two rules”!

Phil Town is a classic value investor, and his book is filled with insight into what how to pick solid stocks to invest in, and then how to interpret the financial numbers to determine when to pull the trigger.  He talks in detail about return on investment capital (ROIC), sales statistics, earnings per share (EPS), stockholders equity, and cash balance.

Rule #1 also talks about the intangibles, such as betting on the jockey (strong company leadership), looking for companies with a moat (barriers to entry for competitors), and demanding a margin of safety.  And he goes into great detail on how to calculate the sticker price (intrinsic value or fair value) of a stock, or a reasonable value for the shares based on all the existing financial numbers, future forecasts and intangibles.  But requiring a margin of safety is critical and a margin of safety is achieved by never paying sticker price for a stock.

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

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