The Five Rules for Successful Stock Investing by Pat Dorsey - Book Summary

My summary of the book The Five Rules for successful stock investing by Pat Dorsey. The book is a great introduction to company valuation and long term "value investing".

I've based many investment decisions on the advice given in the book. The simplified 5 rules are:

1. Doing your homework - 0:58
2. Finding companies with strong competitive advantages or economic moats - 1:36
a. Evaluate profitability (free cash flow, net margins, return on equity, return on assets) - 2:55
b. Economic moats - 4:36
c. Competitive advantage period - 5:15
d. Industry analysis - 5:27

3. Having a margin of safety and company valuation - 6:12
a. Growth - 6:35
b. Profitability - 7:47
c. Financial health - 10:10
d. Bear case - 11:37
e. Management - 12:12

Ratios - 14:35
Intrinsic Value of a company - 17:46

4. Holding for the long term
5. Knowing when to sell

Shortcuts - 18:39

The book gives advice on how to do a fundamental analysis, looking at profitability, growth, leverage, economic moats. It also gives guides on how to calculate and use ratios and valuate the intrinsic value of a company.

Chapters:
00:00 Introduction
00:58 Doing your homework
01:36 Competitive Advantage and Moats
06:12 Margin of Safety and Company Valuation
14:35 Ratios
17:46 Intrinsic Value
18:39 Shortcuts

[Value_Pilgrim]

I suppose a reading list as follows may be useful to most people :
1. Phil Fishers - Common Stocks
2. 5 steps
3. Little book that builds wealth
4. Its Earnings that count.
5. The Investment Checklist.

[sajalvats]

Pls improve sound quality...sounds choppy..anyway great video.... 👍😊

[maxaristocrat]

Awesome!!! I wish you millions subs in few days 😜