Rule #1 Investing Screen
|Rule #1 Investing||S&P 500|
|Five Year Return:||27.8%||13%|
|Ten Year Return:||12.6%||5.4%|
While there have been numerous successful value investors throughout the years, Warren Buffet is probably the most famous. According to Mr. Buffett, there are only two rules to investing: Rule #1: Don't lose money, and Rule #2: Don't forget rule #1. In the book, "Rule #1" (2006, Crown Publishers), author Phil Town lays out an investment strategy that attempts to follow Mr. Buffett's rules.
A former green beret turned river guide, Phil Town was introduced to Rule #1 investing by a client who was almost killed during one of his guided river trips. Following the Rule #1 approach to investing, Town says he turned $1,000 into $1 million within five years.
The key, according to Town, is to purchase "wonderful companies" at attractive prices. Armed with the principles of Rule #1 investing and the array of quality free financial data and tools on the Internet, Town believes individual investors can easily outperform the market with just 15 minutes a week. Table 1 summarizes Town's Rule #1 investing approach.
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