Rule 1 Investing?

[royemunson]

Anyone tried this? I have and I did quite well with it.

Just wanted to get the fastlane viewpoint on rule 1. maybe
it's here somewhere but as this wonderful forum grows,
it's harder to find.

I saw Phil Town in person touting the same tools he still
touts today.

I read his book and if you apply the principles they are
simple and effective.

Being an accountant, you couldn't get a better education
on how to determine the value of a company.

Any other thoughts? More slowlane on this standpoint
but when you start making money you have to put it
somewhere right???

JOe

 

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[BryanC]

Sounds highly interesting. Can you tell us what it is or will I have to search for it? LoL.

To me, Rule One is: Retention of Principal. Whether it's your own or another source of capital.

 

[fanocks2003]

Anyone tried this? I have and I did quite well with it.

Just wanted to get the fastlane viewpoint on rule 1. maybe
it's here somewhere but as this wonderful forum grows,
it's harder to find.

I saw Phil Town in person touting the same tools he still
touts today.

I read his book and if you apply the principles they are
simple and effective.

Being an accountant, you couldn't get a better education
on how to determine the value of a company.

Any other thoughts? More slowlane on this standpoint
but when you start making money you have to put it
somewhere right???

JOe

Rule number 1 in my books is: "Guaranteed buy-out of my stake in X years".

 

[tchandy]

I saw Phil Town when he was ighlighted on CNBC a year or two ago. I then read his book, Rule 1. I think it's a good principal but you just have to follow it to you suit your needs in investing. I used it with investing in Netflix and did well. It followed all of the steps Phil was talking about. So I think it can work for. As for fastlane, it may take time unless you have a lot of money to use to invest in stocks. Since I haven't used Rule 1 for long, just going off of what I know.

Tom

 

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[MJ DeMarco]

For those of us not versed in the "rule" can you give us a synopsis? I don't recall this being discussed here.

 

[royemunson]

Rule 1 follows the "Warren Buffet" and Ben Graham's principles of value investing - the rule is "don't lose money"

What Phil puts in his book is there are 4M's of investing that anyone who is tired of losing money in mutual funds and 401k's can learn to do by themselves.

Following the 4M's (meaning, moat, management, margin of safety) you take your excess earnings and research good/great companies based on a few simple ratios (nice b/c you can weed through the slew of financials that are provided) and calculate using free or paid tools whether or not a business
is on sale.

So, instead of buying a stock, you're looking to buy a business. Now it's not "INSIDERS trading" as discussed here in terms of building a business and selling shares, but if you want somewhere to place your money and manage it (don't want to use the word control), it's a place to start.

It basically follows a combo of fundamental and technical analysis to pick great companies that's stock price is under valued by 50% or more.

In terms of Phil Town's story he went from 1K to 1M in 5 years following these principles (great rags to riches story).

It can be a bit slow lane, however if you couple it with some other strategies or you need something other than mutual funds, it seems to be a nice alternative.

It's also great learning on how to value a business.

Joe

 

[BryanC]

Well, yes, I would agree. I knew that rule from reading the Intelligent Investor back in 2005ish. Benjamin Graham and Warren Buffet have a fantastic philosophy on investment. It's basically this easy:

Invest to retain your principal and have it yield you additional investment capital resources.

So essentially, when it comes to stock investing, we're looking to enter a market only once and park our resource (Federal Reserve Notes) in the bank account of a proven corporation in exchange for an ownership interest with a self replenishing resource stream.

To me, money is basically just like any other product in the society. My job is to basically manipulating it to funnel into my bank account by people pounding down my door to give it to me because they have a problem they need easing rather than hoarding their cash. I think this way in business, so naturally I think like this in my investment strategy. I want to own a business that people go crazy over to get served by. Like my businesses. Every business I have every created has been successful because I've always picked the best products and services to sell. I want to own a stock in a business that has the same superior intellect as me so I will always have to pick a stock that is as good as me.

I don't really have to produce anything myself, I just have to direct the flow of products from the producers to the consumer and I'll receive my cut in commissions. And if it's an on going problem the consumer has then I'll have my money in something that is proven to self replenish in supply as consumers chaotically demand the product that way my bank account is also self replenishing.

You see, I'm out for the same ancient yield we humans used as farmers in the Sumerian days. In those days, I wanted to own my cow and have it produce additional cows for personal consumption and possible resource exchange. I wanted to have my cake and eat it too.

That's right, I said it.

I want my be able to milk my cow and have it produce more and more cows. So I can eat them and also so I can take my cow into the market place and exchange them for things like Plasma TV's or Ferrari's.

I just want to be able to own something for ever that will provide an ever lasting stream of resources to support lil' ole me.

But if you think as everybody as your Debtor, and you're the main top dog Creditor then you'll also be on the scene like a mean machine. The way I see it, everybody owes me something. They owe me something because I own the planet. I want to think in terms of Principal is stationed and cushioned. I want to make sure my principal is safely nestled in the bank accounts of good corporations so that I can get wired my monthly dividends.

Plus you only can get rich as fast as you give it so you want a good resource stream flowing to you to acquire additional and additional streams of resources.

To me, I try to think like a Rothschild. The sooner I create a big riven of liquidity the better off I'll be. So, my theory on investment is this: If I am digging a pound. I want to be able to go get fish out of this pond for the rest of my life. I want to dig my pond and fill it only once. But get that stream of fish for the rest of my life. Dude, I'm just to bloody lazy to keep digging ponds. I want to setup my umbrella and turn on Glenn Beck. LoL.

So you buy something you want to own forever and something you know that will be easy to maintain and can be automated overall.

Plus, the more I start looking at this stuff from the meta-physical perspective and applying my own philosophies. The way I see this world is this: God or what ever you want to call it that set this whole thing up created it economically so that we have an unlimited supply of self replenishing resources. And thanks to man's manipulation of God's economy with Debt based Fiat Paper Money, acquisition of those resources is only closer at hand because so many producers went into debt to finance their innovation in the 20th century that we now have more tools and resources available than at any other time in the history of the world... Today you might have more poor people than ever before because of the way our world wide monetary institutions and compulsory school system design people. But, at the same time, you have more wealth and real world resources to tap and milk than ever before in the history of the world.

But then again, you give and take so we have the Corporation for our selves so we can play the game of monopoly. If I want to play the bigger game, I can use my Corporation like it's the little man on the monopoly board. I can take risks and cover my butt.

The biggest resource to milk more resources off right now is obviously the Fiat Currency and the Internet. Fiat Currency is so flush in our society you can abundantly create any kind of business or architecture you desire. There is so many people with so much capital it's amazing there isn't more true Capitalists that see the billions of opportunities. And the internet. For virtually nothing, you can be in business the same day. There is so many resources to use to build anything you want. Forums, hosts, merchant accounts, advertising and communication mediums, and on and on.

So yeah.

It's a good time and there lots of investment opportunities. :smx6:

 

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