Five Rules for Successful Stock Investing:
Morningstar's Guide to Building Wealth and Winning in the Market

Rules for Successful Stock Investing
By Pat Dorsey

Summarized Overview

Book Description (From Back Cover)

Written by Morningstar's Director of Stock Analysis, Pat Dorsey, The Five Rules for Successful Stock Investing includes unparalleled stock research and investment strategies covering a wide range of stock-related topics. Investors will profit from such tips as:

• How to dig into a financial statement and find hidden gold . . . and deception
• How to find great companies that will create shareholder wealth
• How to analyze every corner of the market, from banks to health care

Click Here to Buy this book from Amazon and Get Great Offer!!!

Book Review

• Although successful stock investing is not so easy, it is that simple. All the five rules introduced by Pat Dorsey are in fact, what makes stock selection and its timing are easier to evaluate and decide which stocks to buy or sell.
• The common mistakes made by stock market investors. All the seven mistakes are practical and frequently happen to novice stock investors, again and again. Want to test if the common mistakes is still valid? Buy the stocks that you plan to buy before reading the book. The probability that you will make the same mistakes will be as high as 90 per cent.
• How to read the financial statement in the annual reports. The focus are on the balance sheet, income statement and the cashflow statement. Pat Dorsey give real life example on how to read them using financial statements from Dell and Hewlett-Packard (HP) using data through January 31, 2003 and October 31, 2003 respectively. You'll be amazed on how his simple method is able to reveal the totally different business model for each companies (although both are selling computers); and their niche as well. On top of that, you'll also learn six warning signs of false accounting.
• Overview on individual market sectors. Pat Dorsey outlines the advantages and disadvantages of each sectors as well as the "Hallmarks of Successful" factors. You will be provided with the "Investor's Checklists" at the end of each sectors so that you know what type of data that need extra attention in analyzing them. The market sectors covered are health care, consumer services, business services, banks, asset management and insurance, software, hardware, media, telecom, consumer goods, industrial materials, energy, and utilities.

• Any value investors. If you are big fan to Warren Buffet and prefer fundamental analysis for your stock selection, this is the book you can't afford to miss. Pat Dorsey guide you on how to calculate perpetuity values for stock valuation as well as its margin of safety
• Novice investors with stock market basic knowledge. Pat Dorsey outline the important points in simple and easy to understand manner. However, you might need to read it over and over again for better understanding.

• Total beginners. You might find it difficult to understand what is intrinsic value, margin of safety as well as financial statement.
• Pure stock traders. This book is not suitable for technical analysis devotees as it did not covers anything about how to read stock trading charts.

About Pat Dorsey and Morningstar

Click Here to Buy this book from Amazon and Get Great Offer!!!

Table of Contents

Chapter 01: The Five Rules for Successful Stock Investing
Chapter 02: Seven Mistakes to Avoid
Chapter 03: Economic Moats
Chapter 04: The Language of Investing
Chapter 05: Financial Statement Explained

Chapter 06: Analyzing a Company - The Basics
Chapter 07: Analyzing a Company - Management
Chapter 08: Avoiding Financial Fakery
Chapter 09: Valuation - The Basics
Chapter 10: Valuation - Intrinsic Value

Chapter 11: Putting it All Together
Chapter 12: The 10-Minute Test

Chapter 13: A Guided Tour of the Market
Chapter 14: Health Care
Chapter 15: Consumer Services
Chapter 16: Business Services
Chapter 17: Banks
Chapter 18: Asset Management and Insurance
Chapter 19: Software
Chapter 20: Hardware
Chapter 21: Media
Chapter 22: Telecom
Chapter 23: Consumer Goods
Chapter 24: Industrial Materials
Chapter 25: Energy
Chapter 26: Utilities

Click Here to Buy this book from Amazon and Get Great Offer!!!

Other Readers' Review

"I have tried a lot of investing books but never been so lucky to have one of this kind. a very neat explanation and step by step guide for novice investors. I would recommend this book for any one who would like to step his or her first steps toward right investing career. a second step is always little easier than the first one, I would like you to read and understand what Pat Dorsey is trying to explain to you and then you may expand your knowledge with more in-depth finance/investing books. Good luck for your investing." (.....By Khalid, Kuwait)

"Dorsey is one of the people behind the Morningstar system for evaluating mutual funds, stocks and electronically traded funds - the system that has made Morningstar one of the most respected names in investing. Dorsey presents the nitty-gritty of investing in this book. Most of the book is very understandable, and is the perfect book for anyone wanting to learn how to invest effectively in the stock market. There is probably no better general introduction to investing on the market. The only difficulty is the material from chapters 3 - 6, where Dorsey explains the math and concepts behind all of the letters you see when you look at market information (like P/E Ratio, P/S Ratio, ROI, ROE, etc.). It can be a bit intimidating, but (a) you can read the book and skip these chapters with no problem, and (b) it is worth the effort to at least look at the math, since Dorsey tells you what figures are helpful, what figures are not, what figures are very important in evaluating an investment, and what figures are misleading. Before you invest $10 in the market, spend the money on this book. Your portfolio will love you for it." (.....By Joseph, US)

Click Here to Buy this book from Amazon and Get Great Offer!!!

"This is by far the best stock market book I've ever read. I read a lot of good books, Intelligent Investor, and One up on wall street. The Warren Buffett Way, The Essays of Warren Buffett, The little book that beats the market, and this is by far the most helpful ccause it guides you step by step and it really goes into details. Most of the books just narrates with generalities. I really like the part where it teaches you how to look look at the income statement, balance sheet and cash flow, how to compute the future cash flow and get its present value and how to compute the intrinsic value. After discusing the procedures, it completes it with real life example the goes tru step by step. After each chapter, there is a summary. Highly Recommended!" (.....By Emerson, Philippines)

"This book shows you how to calculate the value of a stock like Morningstar it also tells you the percents that Morningstar uses when they calculate the fair value on a stock and what price to buy a stock at. If you like figuring this stuff out yourself BUY THIS BOOK, I haven't found any other book that gives this information yet." (.....By LLHawk101, Canada)

"Don't just read this book and let it languish on your library shelf. STUDY this book carefully, and keep it with you for reference. Chapter 5, "Financial Statements Explained" is in my opinion, the most important part of the book. As an investor, understanding what the Cash Flow Statement and Balance Sheet is telling you is the only way to understand what's really going on in the company. Did you know that the Accounts Receivable entry can tip you off that the company may be in trouble? The Balance Sheet can tell you if anything is tying up the companies cash flow and reducing earnings. You can't discover this essential information in any other way than by reading the financial statements and understanding them. Pat Dorsey, the author, is a master in explaining these important concepts without talking down to the reader. You probably won't take everything in on the first pass through the book. It will require some time and work on your part to really understand what Dorsey is saying, but then when has anything worthwhile in life come without effort? If you can buy only one book on investing this year, buy this one." (.....By Vincent Labash)

"This is the most practicle book on value investing that I have ever read. The book is easy to understand and really presents difficult financial concepts well. It contains real world examples which have helped me evaluate companies, industries, and sectors to truely benefit from value investing. I highly recommend this book for anyone trying to bolster their investing knowledge or looking for a fresh perspective on Graham's investment principles." (.....By S. Evans)

"This book is best for those who have some understanding of stock investing, and want to take greater control in managing their portfolio. Unlike so many "how to" books on stock investing, Morningstar's Guide starts with a basic explanation of understanding financial statements (something that too many investors simply ignore), and building upon those basics. Then it introduces the reader to how to value the stocks relative to "real" value. Finally, the Guide ends with an almost 100-page analysis of the pertinent characteristics of stocks in major industry groups (eg, energy; healthcare). For a great and complete primer, this one hits the mark." (.....By JL Turner, US)

"Borrowed this from the library and decided to buy it after reading. Dorsey gives the "Morningstar" method of evaluating stocks, which emphasizes safety by choosing stocks with a wide "economic moat," cash flow and income to survive worst case scenario. In fact, one of his rules for investing is to envision the worst case scenario for each stock. The method he outlines here is extremely rigorous and time-consuming. I don't see how anyone could take the time to evaluate each stock in a 10-20 stock portfolio using his method unless you didn't do anything else, i.e, unless you're a professional investor. That said, he does give lots of good points and cautions. The section on evaluating a company's financial statement is very thorough and detailed. Also valuable is an in-depth chapter on the ins and outs of all the major and minor market sectors, banks, technology, energy, health, and etc." (.....By Q)

Add Your Review

Click Here to Buy Five Rules for Successful Stock Investing:Morningstar's Guide to Building Wealth and Winning in the Market from Amazon and Get Great Offer!!!

Highly Recommended FREE Sign Up