THE FIVE RULES FOR SUCCESSFUL STOCK INVESTING by Patt Dorsey
Author: Pat Dorsey is the founder of Dorsey Asset Management. He was director of research at Sanibel Captiva Trust, an independent fund for high-net-worth clients, and director of equity research at Morningstar. At this company, he played a key role in developing both the competitive advantage analysis and the rating methodology for Morningstar's economic moat rating. He is also the author of The Little Book That Builds Wealth.
Book: This book is the extended version of his other book "The Little Book That Builds Wealth". In fact, more than a book, it is more of a manual or a guide that aims to guide the reader in the search for excellent businesses that trade at a discount to their intrinsic value. It is divided into two main parts: The first one is devoted to Mr Dorsey’s “quality” value investing philosophy. He explains how to identify moats, avoid mistakes, analyse financial statements, perform the valuation, etc. In the second part, he provides a guided tour throughout the market, where the key points of each industry are explained in a different chapter. Banking, utilities, power, telecommunications, software, automotive... almost all relevant industries are discussed.
Opinion: This might be one of the best books about the topic in terms of knowledge per page. Although the first part of the book is great, there are many books/podcasts/videos where you can learn that stuff. However, the second part of the book could be the most comprehensive way to learn the basics of each industry. The only bad thing about the book could be that it is a bit outdated (2004), so it doesn’t capture the recent trends and evolution of some industries.
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