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