|Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week!
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Phil Town is now a very wealthy man, but he wasn't always. In fact, he was living on a salary of $4000 a year when some well-timed advice launched him down a highway of investing self-education that revealed what the true "rules" are and how to make them work in one's favor. Chief among them, of course, is "rule #1": "don't lose money." Other rules are: don't diversify...think like an owner, not an investor ... never, ever be seduced into thinking the market is efficient. Town also believes strongly in "betting on the jockey," putting your faith in managers who've proven their financial mettle. Not only does Town reveal fresh methods for identifying who the truly reliable managers are, but he shows you how to test whether they really have faith in the businesses they're running.
By far, the most controversial of the audiobook's assertions will be that giant 401(k) type mutual funds can't help but regress to the mean, and in the next twenty years, the mean could be very disappointing indeed. There's a very real chance that a 401(k) investor could see his holdings not grow at all in the next few decades. Fortunately, Town's stockpicking techniques are meant to walk investing phobes through the do-it-yourself process, equipping them with the tools they need to make quantum leaps toward financial security.
Rule #1 says something new, and it says it in a way that every listener can understand.
From the Compact Disc edition.
- Rule # 1
It provides a very interesting and straight forward apprach to investing. It the methods are followed you will not loose money. It will take more than 15 minutes a week to follow all the methods described....more info
- John W
This book is well worth the money. It works as a reference and a tutor and how do for the Buffet method of investing. It is well written and has an entertaining style.
The hard part is identifying a set of stocks that qualify. I spent weeks trying to do it and the ones I came up with were all out of price range. The solution that I found to that was to subscribe to[...] and their advisory monthly letter/email. The tracking methods are clear and easy to apply....more info
- Benjamin Graham revisited with a weird twist
I never heard of Town until a few weeks ago when my wife saw him on a panel of mostly investment people on CNBC. I watched the show for a while, and I almost fell out of my chair when Town promised 15% returns on national TV. As a Registered Investment Adviser, I find it hard to believe the SEC would allow him to make this claim.
The 70-year historic return of the S&P 500 is between 10 and 11%. If one believes that future returns will be like past returns......and this is a big if.....one could bump up your portfolio return by utilizing small cap value stocks (Fama-French 3-factor study), foreign stocks, and REIT's.....but you would still not achieve a 15% return.
I am a big fan of index funds. Every study I have seen shows that index funds outperform actively managed approaches over long periods of time. The few people that have beaten the S&P 500 over long periods of time can be counted on one hand (Lynch, Buffett) and Lynch did not do it for 30 years either.
Out of curiosity, I picked up his book. I started laughing when I read it.....because he was replaying the 1930's strategy of Benjamin Graham....try to identify companies that are worth $1 but are selling for $0.50......then sell them when they rise to $1.00.
I have no issue with the Benjamin Graham approach......but it is a lot of work....certainly more than 15 minutes a week that Town espouses....and even Graham himself said on his deathbed that his value approach no longer seemed to work as well as it did in back in the 1930's.
Many years ago, I looked at several companies, and tried to calculate the intrinsic value of their stock. The idea is that if the stock is currently selling below its intrinsic value (its margin of safety).....then buy the stock and sell it when it reaches it intrinsic value. What I found was that the slightest error in forecasting caused dramatic changes in the intrinsic value. I think Warren Buffett's greatest secret is how he is able to fairly accurately (his record is not 100% either) determine a company's intrinsic value.
As I read further into the book......it even got more bizarre when Town threw in technical indicators for selecting stocks. If you are really lucky using Graham's fundamental value approach......you have some chance of equaling the return of the S&P 500......but you might as well read tea leaves as use technical indicators to select stocks. Most academic studies have found no value in the predictive powers of technical indicators.
One has to also ask, where is the substantiated data that Town's method of picking stocks has beaten the S&P 500 at the same level of risk as the S&P 500?
Town also ignores the behavioral finance aspects of investing. Very few people have the discipline to remain 100% invested in stocks when a Bear market shows up. Most people chase the winners and therefore buy high and sell low.
As the greatest investor of all time.....Warren Buffett......has said......most investors should use index funds for their investments.
I would suggest people save their money and not buy this book.......but instead buy a couple good books on index fund investing and asset allocation.
How Asset Allocation Can Help You Achieve Your Financial Goals
Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing...more info
- Delivery review only
Ordered and received in a short period of time, new and in great condition after shipping. Would order from this merchant again...more info
- Good resource for novices and amateurs
For those of us who are not professional investors, you will find some good solid advice. The most valuable aspect for me is how the author values the current and future worth of stocks. The research will take me more that 15 minutes a week, and I'm happy to take the time. I recommend The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) along with this book....more info
- Rule # 1: You must buy this book
Phil Town has a great approach to dealing with stocks. There is no shuck and jive. His method is clear and understandable. Even if you are not investing now, the technique is work considering !...more info
- Truly Useful
This is the best book about investing that I've read. Its not a "get rich quick" book. The advice is logical, practical and realistic. To put it to use you need access to historical information that is a little hard to find (for free) but its there if you poke around a bit. It would be nice if the info was program accessible so I could automate the whole thing, but the "keepers of the data" make it expensive to accomplish....more info
- A must read, especially in this economy.
I bought this book last year. I read it twice before embarking slowly with real money. I Started with small investments. Over the last 11 months, my investments are up 14.8 %. I am not kidding. What happened is that I did not have much time to look at methods that Phil was talking about. As I started Googling, I found that there was a support community out there. [...]
With the help of my own diligent research, and Stock2own, I was able to make some sound investments, and not only did I NOT loose money, which is the first principle of Rule #1 investing, but I actually made almost 15%!
Wow - thanks Phil.
- Rule 1 Investing
Very good information but not easy to put it all together for actual use. The calculator on the Internet site makes it easier. However, many calculations are not able to come up with all the key ratios because of data error input that is outside of the users control.
In the final analysis the information is useful but not simple since it takes considerable effort and time to research each selection before one is able to arrive at a decision point to consider buying or rejecting the company.
An Excel template with formulas would be helpful in addition to the "calculator" on the ruleoneinvester.com site....more info
This book really help us to undestand how is it possible to become a millionaire. I'm going to follow it....more info
- BUY THIS BOOK!!!
I have read MANY financial books and by far this is the BEST one!!! I have bought enough books for my entire family to read and I'm planing to give many of these books away for Christmas presents!!!
I have made a lot of money from what this book teaches!!!
Please READ THIS BOOK!!!
Phil Town is now one of my heros!...more info
- Mis-leading title, 15 minutes a week is insufficient for investing research
The book was a great primer on researching companies and it had a solid strategy for selecting stocks, but the amount of time required and the complexity of the calculations made this effort harder than the book title indicates. That being said, I used the steps in the book to purchase stock, and I feel secure that my investments will make money.
This book is a good buy, but be ready for some number crunching work....more info
- Some good ideas here
The really brief summary of this book: Buy low; sell high.
In some ways, this is a typical "how to get rich, quick" book. In other ways it is unusual.
It reads like a huckster's infomercial, but I found no request to send money. Town does offer
seminars that seem to cover the same material as the book (at a much higher price) and the
seminars seem to include a pitch for some software tools sold by a third party while the
same capability is available for free but in a less convenient form. The book even suggests
using the free tools until you think the extra convenience is worth the extra expense. The book
does not promote the seminars.
The cover claims the method is simple but it is far from simple, especially for the audience
it seems to be written for. It explains how to open a brokerage account, and defines such
common terms as earnings per share and price earnings ratio. The method is a combination of
fundamentals investing, value investing, and market timing through technical analysis of
trading volumes, although Town insists on denying it.
Here is a Town's less brief summary of the method. Find a wonderful business. Know what it's
worth as a business. Buy it at 50% off. Repeat until very rich.
Here is my summary. Pick an industry you understand based on your job or hobbies, your skills,
and the places you make or spend money. In that industry, identify firms that are hard to
compete against because of, for example, favorite brands, patents, pricing power. Look at the
numbers: return on investment capital, sales growth rate, earnings per share growth rate,
equity growth rate, and free cash flow growth rate. All must be over 10% for the last ten years,
last five years, and last year. Eliminate those that do not have a great CEO, one that works
for the benefit of the owners. Project the numbers ten years into the future to predict the
stock price then. Calculate what the stock price should be now to give you a 15% per year profit.
If the actual price is less than half that, then you want to buy that stock. Select the time
to buy and the time to sell using three different technical analysis computer tools, free or
purchased. If the stock goes up enough in price, so you would not get 15% from then, then sell it.
Town notes with approval moving in and out of the same stock 11 times in two years. Keep a list of
stocks that pass all the tests except the 50% discount. Spend 15 minutes per week checking to see
if any have become cheap enough, or if any of your holdings have become pricey enough that they
should be sold.
The title is the only place that claims 15 minutes per week is all that it takes. The initial
screening time is not estimated in the book, but I estimate it might take many hours per week
for many months. The 15 minutes estimate for maintenance might be right if there are any stocks
on your list of stocks to buy if the price comes down enough. The list might be empty most of the
time and then you are back to the initial screening, which does take a lot of time.
Town offers some solid advice. Get out of debt. You will not get rich making 15% in the stock
market and paying 18% on a credit card. Try this system on paper for a few months to a few years,
before using real money. With real money, start small. Use one of the low cost on-line brokers.
For those that want to be active traders, rule number one is good advice: The first step to make
money is to avoid losing money. Be willing to sell.
Town does some cherry picking to attempt to discredit index funds.
This book is not a recipe for going broke. It is not how I want to spend my time, but it might be
how you want to spend your time. The biggest weakness seems to be doing the initial screening.
I fear your list of candidate stocks might be empty most of the time. Perhaps some other reviewer
or a reader has access to an appropriate data base and can search out the stocks that qualified
at any time in the past. The list might show ABC Co in 1971, DEF Co in 79, GHI in 85, XYZ in 2007.
Then we could see how those few firms did later. Stock fund research departments do that kind of
search all the time, and they are willing to accept much less than 15%.
- Good book for everyone that wants to make money
This is an excellent book no matter what stock trading level your at. It is exceptional good if you are a beginner. This works great in IRA accounts and swing trading. I borrowed this book from the library which I liked it and bought it for Amazon. If you have a friend or family member lossing money in the stock market buy them this book they will thank you forever....more info
- All you need
with this book there is no need to read ay other. A very honest and reliable method of investment. ...more info
- Great concept
I really enjoyed this book. Like all new investment strategies, I will want to test it out on paper for a few months before buying into it, but this seems feasible and makes things very simple.
Very well written, even the most novice of folks can get something out of this. He never talks over your head and takes it step by step.
Good read! Hopefully a sound investment strategy as well!...more info
- Clever Nonsense...
The brilliance of this book is that the author offers some good (though unoriginal) information and makes references to Graham and Buffet. But then offers a "method" that is unproven and unrealistic. So he sounds reasonable and legitimate, while offering little that is worthwhile.
Basically, he recommends looking for stocks that have 10 prior years of perfect financial ratios and for which you can predict another 10 years of the same. And then buying when the price is 50% lower than it should be. TA-DA! You're rich. Why didn't I think of this? Hey, maybe I'll write a similar book about real estate investing. Become a millionaire in one day by finding a really nice 2 million dollar property that's selling for 50% off. Buy it for 1 million and then sell it the next day for 2 million!
He also recommends against diversification. He feels that that once you find a great company, why dilute your potential earnings? Well, most people realize that nothing is foolproof. Having all your eggs in one (or even just a few) baskets is a terrible idea.
Another odd thing is that after finding this gem of a stock, he suggests using technical indicators to move in and out of it over the long term. Well, if technical indicators really worked, there would be a lot more wealthy day traders around. And if we could predict the price movement of stocks using these indicators, why bother searching for a perfect stock? Why not just use these indicators to become rich instead of going to all that trouble? And I never quite understood why you would hold the stock and move in and out of it after the price rose to a point where it no longer met the original criteria. Or, if you can trade in this stock when it is no longer at half price, why can't you buy some other stock that's not at half price? Apparently, once you have a relationship with a stock, the original criteria are no longer important.
Despite the attempt to use their names to legitimize his method, I'm sure that neither Buffet or Graham would be in favor of this kind of speculation. And they certainly wouldn't think that anyone, especially a novice investor, could predict the next 10 years of earnings for a company, as the book suggests they can. The "professionals" have an extremely poor track record of predicting earnings for even 1 year. Anything more than that is pure fantasy. And of course, the author offers no evidence that his method works. Or that it has worked for him in the past. I'm betting the way he went from $1,000 to $1,000,000 is from selling this book....more info
- Where did this book come from?
As a former broker from the mid 80's to early 90's I can honestly say that alot of what the author speaks about the pro's hoarding information from the average Joe is dead on. The only problem is they rarely use any of them. Most brokers, fund mangers, analysts, etc think with their paycheck and have a laser guided mission to take you hard earned cash in commissions and fees.
Not that they don't want you to make money, because the more you make, the larger the commission. That being said, this book will give YOU an advatage in the markets without pouring over countless hours reading charts trying to "time" a buy or sell signal only to lose money wondering what happened. The "wave runner" analogy really hits home as the little guy has the ability to get in or out well ahead of the big guys.
This book combines excellent buy and sell signals by combining key fundamentals with critical technicals that show you what the big guys are doing. ...more info
I am a novice when it comes to investing, but reading this book (after seeing Phil speak live) gave me all the tools and the confidence I needed to get into the market. So far the Rule #1 strategy is working quite well....more info
- Straight scoop from one who has done it.
Phil Town learned investing from a mentor--here he offers to mentor us. Most of the book is his story followed by directions on how to do what he did. He describes how to select and manage investments. The book also includes some technical explanations so the reader can understand what financial people are talking about. I borrowed a friend's book, read it and decided I needed my own copy. This book should get much more exposure than it has already received. This would be a great starting point for investment clubs or those individuals who want to become knowledgeable and skilled investors. ...more info