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

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Summary: Watch out for mathematical errors
Review: Great book on investing. The book covers information you would normally have to search in many places for.
There are errors in the perpetuity formula on page 150 and the multiple used for discounting on page 144 should be 1.1449 no 1.449.

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Summary: I haven't read this book, but . . .
Review: How can an amateur (even an intelligent, well-educated amateur) compete successfully with professionals who spend their entire work days on Wall Street researching a multitude of sources and networking with well-informed people? Especially, when you consider that some of these professionals are even more intelligent and even better educated than the amateur?

Until authors of this type of book can give me satisfactory answers to these questions, I will spend my money on something else.

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Summary: Accessible, solid, grown-up
Review: I retired at 51 on my investments and have spent much of my time trying to counterbalance the instant-gratification claims of so many of those selling seminars and "help" to the investor.

While few people would be so foolish as to pay $40,000 for a Honda Civic despite that car's solid engineering, many will buy a stock with no concept of what its fair-market value may be. Of this number, some are subscribers to the Greater Fool School of investing. They'll happily overpay for a popular stock in the arrogant belief that they'll be able to unload it for a profit to some Greater Fool. Sometimes, they will indeed make a profit. (At other times, they'll make an excuse.) This book is not for them.

The rest overpay not because they subscribe to the Greater Fool school but because they simply have no idea of how to value a stock. THAT is where this book shines. It will make the investor more conscious of what a stock is worth -- thereby avoiding the payment of $40,000 for a Honda or (in some cases) the payment of $100,000 for a Yugo!

Will the identification of value stocks and the discipline of not overpaying for a stock guarantee a profit? On any given purchase, of course not. However, it is a fool's task to argue that conscious investing based upon some sense of a company's true value will not reward more of its practitioners than Greater Fool speculations will over time.

If you're a serious investor with at least the discipline and patience than you demand of your own children, following this book's counsel should help you to make more money with greater safety. It's more accessible than The Intelligent Investor and a must read both for the novice and for the experienced investor who would like to pick up some distinctions that will improve his or her performance.

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Summary: WHY allow book reviews by those who don't read the book?!
Review: I was utterly appalled by the sheer stupidity of the book review submitted by 'amodeus1791 from New York City'(28Jan04) - who claims he never read the book, but then he submits a self-admitted ignorant review of this book. I was even more appalled that Amazon allows "non-review" book reviews to be submitted!! Evidently, `amodeus1791 from New York City' is a terribly un-read, unsophiticated, myopic, arrogant person who is abundantly ignorant of history also. Clearly, `amodeus1791 from New York City' is the epitome of an example for that insightful maxim "Living is easy with eyes closed - it's understanding all you see."

So-called amateurs have made incredible contributions to knowledge in a variety of technologies and sciences in the ecourse of human history. And so-called amateurs have also made incredible millions in the stock market too. It is precisely the discerning amateur eye that has broken ill-fated innummerable mindsets throughout history time and time again. Why? Simply because so-called 'amateurs' aren't afflicted with myopic blinders - or blindfolds as in the case of 'amodeus1791 from New York City'. (You also have to question whether or not a respected research company such as Morningstar would really publish a true & pure 'amateur' on such a subject?)

My first recommendation is that all Amazon readers trash ignorant garbage that is spewed off so indiscriminately like that from `amodeus1791 from New York City'. I also recommend that Amazon refuse to allow "non-review" book reviews to be published on Amazon!!

Actually, if you are looking for a variety of perspectives on a very complicated subject that is part science, part gambling, part intuition, and part art - then this book is as good as any other "random walk" before graduating on to the Benjamin Grahams and John Murphys of the world. It is well written, well researched, well organized, and well thought out -- unlike `amodeus1791 from New York City'.

And for that matter - don't place any faith in my review either -just read the book if you are a semi-serious student of the subject. Because if you are a semi-serious student of the subject you'll want a variety of input - and you'll know how to make up your own mind as to what market perspectives suit your style of investing.

And by reading the book - you'll know infinitely more about it than `amodeus1791 from New York City' does!

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Summary: Insightful!
Review: The best investing principles, as clearly reiterated here, are stable and evergreen. As an investor, you'll welcome author Pat Dorsey's unambiguous, straightforward presentation of the always valid wisdom of the markets. This conveniently organized book offers several chapters of general relevance to investors in all markets and industries, including an industry-by-industry examination of the determinants of value. The title is cute, but the content isn't about the title's rules - it is about learning and obeying the basics of stock investing. We recommend the author's long term perspective. Many of the directions he sets for potential investments could still be valid years hence.

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Summary: Handles an intimidating subject artfully
Review: There are many books on financial statement analysis, and I've bought most of them...being a liberal arts major who is working toward an MBA in Finance, I've found mastering ratios and concepts related to reading company annual reports frustrating and challeging: my brain seemed not to be wired to be competent in this subject matter. However, I find Pat Dorsey's treatment effective in that he uses the concepts in a less intimidating context than other books might, without watering down the content. Can someone read this book and decipher GE's annual statement to the last footnote? Not hardly. It is often said that it's knowing the essential 20% of a subject that is responsible for 80% of one's success, and this book fills this role in understanding that 20%. Further, the chapters breaking out how to modify analyis of different sectors and industries in the market is also helpful to avoid comparing apples to oranges when evaluating stocks and companies. Beyond this book, the next step up from this would be "Analysis for Financial Management" by Higgins.

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Summary: THE FIVE RULES FOR SUCCESSFUL STOCK INVESTING
Review: This book is the best book on fundamental investing that I have ever read. It is clear, concise and filled with simply stated useful information. For anyone interested in value investing this is a perfect place to start. Financial information is demystified, and the worth and usefulness of each financial statement is explained methodically and completely enabling any investor to analyse a company in a logical and competent manner. Financial ratios and the importance of each is covered.
Additionally, and unusually, a number of industries are discussed, giving the salient factors to consider in each.
There is also an excellent bibliography for additional reading.
All in all, this is a superb book.

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Summary: Very well done - detailed, clear, high bandwidth
Review: This book is very well done. Good job Pat! It is one of the best that I've read. As you read this book, you start to realize that to successfuly invest, you need lots of time and lots of patience, lots of research, plus you need lots of automated tools. It shows you that investing is gambling, if you don't do any research.

But, tools will take you only so far - you also need a team of knowledeable folks who read every word of the 10K reports and find all sorts of ridiculous perks, salaries that are not tied to performance, bonuses and stock options, that self-governed "boys club" give to themselves (because they can).

Then you also begin to understand and evaluate the balance sheet of the company that you work for, and begin to question if it is a five star company.