Big Investor Blog

Summary of Pat Dorsey’s book, ” THE LITTLE BOOK THAT BUILDS WEALTH”. The knockout formula for finding great investments.

Pat Dorsey’s little book THAT BUILDS WEALTH

The Game Plan

  1. IDENTIFY businesses capable of generating above average returns over many years.
  2. WAIT until they begin to trade at OR below their intrinsic value.
  3. HOLD till
    1. business deteriorates
    2. shares are extremely overvalued
    3. a better investment is found
  4. REPEAT till you die.

Economic Moats

If you are able to identify moats properly, your risk of permanent loss of capital comes down drastically.

Instead of becoming an expert in a set of industries, why not become an expert in firms with economic moats, regardless of what business they are in ?

A business that can generate above average cash for a long time is better than a company which can generate excellent cash flows only for a short time.

ROCE is the best way…

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