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Rule #1: The Simple Strategy for Successful Investing--in Only 15 Minutes a Week! [ABRIDGED] [AUDIOBOOK] (Audio CD) (Audio CD)
by Phil Town
| Category:
Introduction to investing, Value investing, Investment guide, Personal finance |
| Market price: ¥ 298.00
MSL price:
¥ 258.00
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Pre-order item, lead time 3-7 weeks upon payment [ COD term does not apply to pre-order items ] |
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MSL rating:
 Good for Gifts |
| MSL Pointer Review:
Practical, instructive, thoroughly useful, this book takes you from a scared and ignorant novice to an unintimidated and educated novice, encouraging you to do your own work and showing you how to get started. |
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Author: Phil Town
Publisher: RH Audio
Pub. in: March, 2006
ISBN: 0739324640
Pages:
Measurements: 5.7 x 4.9 x 1 inches
Origin of product: USA
Order code: BB00090
Other information: ISBN-13: 978-0739324646
Language: English
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- Awards & Credential -
One of the Amazon.com bestsellers in introduction to investining (#7) and personal finance (#13) as of November 26, 2007. |
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- MSL Picks -
This book covers an investment strategy that Phil Town was taught through an interesting turn of events as a river guide. On the cover of the book, Phil refers to "The simple strategy for successful investing in only 15 minutes a week." These 15 minutes of course apply once you have carefully researched the company that you will be purchasing stocks. As with any investment, it is imperative that you do your research on the company and the CEO. Not just, follow the numbers or necessarily the tabloids (for it could be too late to get out by then). Hence, some questionable CEO's out there only have themselves in their best interest and not the corporation (e.g. Enron, Tyco, etc) or its share holders. I think the caveats of risky investment are well covered within the book. Towards the end of the book, Phil tells how he put his money into a risky venture and it paid off but he also expressed some of the complications that could arise in doing so.
Anyone that is in the research field will tell you that it takes time to lay down a foundation that accurately describes any particular field of study, not a mere 15 minutes. In other words, it's your money, don't throw it mindlessly into a company you do not know, follow, or trust especially when it comes to company management of funds. The concept behind Rule #1 is not to lose any money. Phil gives the investor confidence to handle his or her trading, while divvying up the benefits of why not to use a personal advisor or planner. Using this book will aid the new investor from losing his or her shirt in the stock market.
The book is generally geared towards new investors, which was right up my alley in a sense. I found it was written in a systematic process that was incredibly easy to follow. I first heard about Phil Town a few months ago on an MSNBC Millionaire program and actually am glad I took the time to watch the program. If you are looking for a way to be a millionaire quickly in the stock market (overnight), then this may NOT be the book for you. Patience is a virtue in the investment field and sometimes one must have to wait several months or years to see the 15% returns. Phil also explains that we do not necessarily want to find a company, then dump it as soon as we make our 15% but rather invest in a company that we would want to own for 100 years. The book explains this principle in-depth (this is his pedigree). Overall, Phil suggests that we take pride in the company we invest in, and treat it as an ownership for the long haul.
For those new to the stock market, Phil guides you by the hand slowly, and explains the principles in a very easy to understand format. Phil even has the investment calculators on his website (listed in the book) which makes it even easier to follow the program. Phil looks out for the small guy that is on a shoe-string budget during the learning process. He tries to give as many free resources as he possibly can. Phil is a guy that seems to be a straight shooter, he holds to the "what does it boil down to" mantra. While no one can accurately predict the market, Phil dispels some of the myths that are espoused from tabloid or folk theology.
(From quoting Ham, USA)
Target readers:
Anyone who wants to have a new approach to high return investing should definitely examine this book.
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Phil Town isn’t your typical Wall Street guy. An ex-Green Beret and former river guide, Phil Town is a self-made millionaire several times over and America’s most widely sought-after speaker on investing. In his new book, RULE #1, he describes the Rule #1 personal financial strategy in detail so that anyone, even first-time investors,can get–and stay–rich.
Phil Town is the classic Everyman, albeit one whose education and resources were more limited than most. An average high school student, he completed college on his fourth try. Of his early working years, he says he “mostly got dirty for a living,” taking on jobs such as digging ditches and pumping gas. Town spent three and a half years in the Army. He returned from the Vietnam War and found a job in the States as a river guide.
Drifting through California, Utah, and Idaho, he subsisted at poverty level, combining his wages from the guiding season and unemployment. He wore black leathers, sported a goatee, lived in a teepee in the woods near Flagstaff, Arizona, and “drove around in a really loud black Harley Davidson.”
In the early ‘80s, Town’s life changed radically. He was guiding trustees from the educational program Outward Bound down the nastiest rapid on the Grand Canyon’s Colorado River, when his split-second decisions
saved a boatload of people from a whitewater disaster. A grateful and financially astute client returned the favor by guiding Town into serious, successful investing using the first rule of investing as ascribed to by Warren Buffett: Don’t lose money. Within five years, Town had built a borrowed $1,000 into $1 million. His fortunes improved radically, and rapidly, from then on.
Phil Town appears regularly on the same dais as Rudy Giuliani, Jimmy Carter, and Colin Powell as part of the “Get Motivated” touring success seminar. He speaks to more than 500,000 people annually about Rule #1.
Town lives in Jackson Hole, Wyoming.
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From Publisher
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.
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Excerpt. © Reprinted by permission. All rights reserved.
Table of Contents
Introduction: Make Money No Matter What 1
Chapter 1: The Myths of Investing 11
Chapter 2: Rule #1 and the Four Ms 33
Chapter 3: Buy a Business, Not a Stock 39
Chapter 4: Identify a Moat 53
Chapter 5: The Big Five Numbers 65
Chapter 6: Calculate the Big Five 95
Chapter 7: Bet on the Jockey 111
Chapter 8: Demand a Margin of Safety 132
Chapter 9: Calculate the Sticker Price 145
Chapter 10: Know the Right Time to Sell 172
Chapter 11: Grab the Stick 186
Chapter 12: The Three Tools 196
Chapter 13: Take Baby Steps 216
Chapter 14: Eliminate the Barriers 246
Chapter 15: Prepare for Your First Rule #1 Purchase 259
Chapter 16: Q&A 274
Glossary 293
Acknowledgments 301
Index 303
Chapter 1: The Myths of Investing
An expert is a person who avoids small error as he sweeps on to the grand fallacy. - Benjamin Stolberg (1891–1951)
The gold standard of low-risk investing is a ten-year United States Treasury bond, which, at the time of this writing, has a return of about 4 percent. Invest in nothing but these bonds and you’re guaranteed a 4-percent haul. The only problem with such a strategy, especially for the millions of soon-to-be-retired baby boomers, is that, at 4 percent, it takes 18 years to double your money. In addition, after 18 years, even with a low inflation rate of 2 to 3 percent, most of the gain is absorbed by higher prices, leaving you with only slightly more buying power than you had 18 years earlier. Despite this reality, investors buy billions of dollars of these 4-percent bonds.
Why in the world would anyone want to own a bond that barely keeps pace with inflation and realizes almost no real gain in wealth? Because almost everyone is convinced that a higher rate of return necessarily means a lot more risk. And they’re more afraid of losing money in an attempt to get a higher return than of their inability to retire comfortably.
The fact is, a higher rate of return is not necessarily contingent on incurring significantly more risk. Let me explain.
HIGH RETURNS DON’T NECESSARILY MEAN MORE RISK
During a talk at the America West Arena in Phoenix, Arizona, I asked the audience, “How many of you drove your cars here today?” Most people raised their hands. “Okay, almost everybody. And how many of you took a huge risk driving here?” A few hands went back up. “You guys took a huge risk driving here?” I asked incredulously. “Either you drivers didn’t really take a risk and are just clowning around, or at last we’ve found the problem with Phoenix traffic - you people with your hands up don’t know how to drive. Is that it?” Everybody laughed. “Okay, so it wasn’t so terrifying to drive down here. But now imagine that you’re coming here but instead of you doing the driving, it’s your eleven-year-old nephew behind the wheel. Are you taking a lot of risk now?” People laughed and nodded yes. “The trip was the same - going from Ato B. But when you put someone in the driver’s seat who doesn’t know how to drive, a relatively safe trip becomes an incredibly risky trip.”
Exactly the same thing holds true for your journey to financial freedom. If you don’t know what you’re doing, your journey is going to be either very slow or very dangerous. That’s why most people think that going fast (going after a high rate of return) is dangerous - because they don’t know how to drive the financial car, and not because going fast is necessarily dangerous. It’s only dangerous if you don’t know what you’re doing. And the essence of Rule #1 is knowing what you’re doing - investing with certainty so you don’t lose money!
Now, you’re probably wondering, “What about mutual funds? What about all those techniques we learn to minimize risk and maximize returns?” Well, folks, I hate to be the bearer of bad news, but here’s the truth: Being a mutual fund investor is a whole lot riskier than being a Rule #1 investor. Investing in a mutual fund is, in many ways, like handing your car keys to that 11-year-old nephew.
THE MUTUAL FUND SCAM
If you own mutual funds that are attempting to beat the market, and you’re hoping your fund manager can give you a nice retirement, you’re highly likely to be the victim of a huge scam. You’re not alone - 100 million investors are right there with you. Fortune magazine reports that since 1985 only 4 percent of all the fund managers beat the S&P 500 index, and the few who did it did so by only a small margin. In other words, almost no fund managers have done what they’re paid by you to do - beat the market. That significant fact went unnoticed through the roaring 1980s and 1990s as the stock market surged with double-digit growth, bringing your fund manager along for the joyride. But now the ride is over, and investors are starting to notice that their fund managers are pretty much useless. This is not a new observation.
Several years ago, Warren Buffett said this about your fund manager: “Professionals in other fields, like dentists, bring a lot to the layman, but people get nothing for their money from professional money managers.” The key word here is nothing. And yet, what do you do? You give your hard-earned money to one of these guys and hope he can deliver those 15-percent-or-better returns, like the ones you got in the 1990s. Why? Because you don’t want to invest your own money, and because you’ve been convinced by the entire financial services industry that you can’t do it yourself.
Come on, get real. From 2000 to 2003, mutual funds lost half their value. You could have lost 50 percent of your money without the help of a professional. In fact, in 1996 a monkey was hired to compete with the best fund managers in New York. He beat them two years in a row. When I told this story one day to an audience in Los Angeles, someone from the upper deck in the Arrowhead Pond Arena yelled out, “What’s the name of the chimp?” This is proof that some people will do anything to avoid investing their own money.
Peter Lynch, one of the few fund managers who made above-market returns and then got out before the market leveled him, wrote in his book One Up on Wall Street that the amateur investor has “numerous built-in advantages, which, if exploited, should result in outperforming the market and the experts.” In other words, you should be doing this yourself. But you don’t. The reason you don’t is that the entire financial services industry perpetuates three myths of investing to keep people investing with them in spite of the industry’s dismal performance over any long period.
THE THREE MYTHS OF INVESTING
Myth 1. You Have to Be an Expert to Manage Money.
The first myth I want to bust is that it takes a lot of time and expertise to manage your money. It would if investing were hard to learn or if getting the information to make a decision took a lot of time. I’ll prove to you that it doesn’t, even though the financial services industry wants us to believe it does. The industry stands to make billions from commissions and fees if it can keep you thinking you can’t do it on your own.
The Internet has changed everything. Now the tools that used to cost $50,000 a year are available for less than two bucks a day and take only minutes a day to use instead of 50 hours a week. And the Internet tools are more accurate, more timely, and easier to apply than anything your fund manager had just a couple of years ago. All you need is a little instruction and a brief learning period. But don’t bother to ask your broker, financial planner/adviser, certified public accountant (CPA), or fund manager if you should do this on your own. You know what they’re going to say. Something like, “But that’s what I do for you, so you don’t have to worry about it.” Well, you should worry about it. Alot. It’s your money and you’re the only one who really cares about what happens to it.
Even the pros like Jim Cramer, a guy who’s in your corner and who wants to see you invest on your own, doesn’t really know what it’s like to be one of us. Like the rest of the top of the financial industry, Jim’s Ivy League, incredibly smart, loves playing with stocks all day and night, lives it and breathes it and has no sense of what it’s like to be you and me out there digging ditches someplace and hoping we can retire. For these guys it’s a game. Aserious game, but still a game. Jim’s a trader and loves to speculate. Following his approach, you’ve got to put in five to ten hours a week minimum and you’re playing a very dangerous game with money you can’t afford to lose against really rich, really smart, and really motivated guys - guys just like Jim.
If you think you can win at that game, be my guest. And if you do win, my hat goes off to you. You’re a lot smarter than the rest of us. For everybody else, me included, there has to be another way. Most of us don’t have five hours a week for investing. Let’s face it. We’ve got kids to raise, lives to live, and jobs that already take more time than we have. We also don’t want to be chained to watching the stock market or to become frantic day traders. What fun would that be? We’re just looking for something to invest in that gets really great returns without the risk of losing money and without spending a lot of time at it.
Rule #1 is investing for the rest of us.
Myth 2. You Can’t Beat the Market.
Okay, it... |
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James J. Cramer, host of CNBC’s “Mad Money” and Markets Commentator, thestreet.com, USA
<2007-11-26 00:00>
A really smart, homework-driven read that tells you precisely how to do it. Rule #1 may be the clearest and best book out there to get you on the path to riches. This one’s special! |
Publishers Weekly (MSL quote), USA
<2007-11-26 00:00>
Town's investment guide is manna from heaven… engaging and accessible… Town’s ability to break down that philosophy into a detailed, step-by-step program that can be understood by any reader with basic math skills is unique… will leave readers feeling empowered and ready to manage their money themselves. |
Jonathan Hoenig, Portfolio Manager, Capitalistpig Hedge Fund, and regular contributor to Fox News, USA
<2007-11-26 00:00>
Rule #1’s common-sense, pragmatic approach is money in the bank. This step-by-step guide is methodically researched and terrifically accessible… Can you really beat the mutual fund mangers and so-called experts at their own game? Hell yes! |
Elizabeth MacDonald, Senior Editor at Forbes Magazine; regular, “Forbes on Fox”, USA
<2007-11-26 00:00>
A refreshing departure from those boring investing books… If you're tired of being shut out of how exactly the rich guys on Wall Street make money, this important book will teach you how to run with the bulls. It's priceless. |
View all 14 comments |
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