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From the bestselling authors of The Motley Fool Investment Guide and its successful, savvy prequel, The Motley Fool's You Have More Than You Think, here's an engaging, humorous, and practical stock-picking guide, packed with Foolish insights, that caps off this invaluable personal finance trilogy from David and Tom Gardner.
The Motley Fool's Rule Breakers, Rule Makers presents the sophisticated, yet easy-to-understand stock-picking methods that have kept the Motley Fool portfolio beating the Standard & Poor's averages by more than 30 percent. The key is investing in small start-up companies that have historically offered the greatest investment returns (the "rule breakers") as well as huge companies that maintain legal monopolies in their fields (the "rule makers"). The Gardner brothers explain
* How to identify the best investments in today's public markets: the rule breakers and the rule makers
* The definition of a "tweener" -- a maturing rule breaker -- and how to detect the Tweener Death Rattle
* When to buy and when to sell, and how to manage your portfolio on a regular basis
In their first two books, the Fools got you started in investing and freed you from the fees and worries that Wall Street's Wise Men have been imposing on investors for decades. Now, by sharing their methods for picking rule breakers and rule makers, they guide you through a stock market that has seen company valuations soar to unprecedented heights and that promises to continue providing roller-coaster thrills. The Motley Fools are the ultimate companions to bring along for a safe, fun, and profitable ride.
The sassy creators of the popular personal finance Web site and authors of the bestselling The Motley Fool Investment Guide (1997) now offer advice on how to evaluate the investment potential of specific companies. Here, the Gardners proffer five key principles by which to judge innovative "Rule Breaking" companies. Among them: "top dog-and-first-mover in an important emerging industry" (e.g., Amazon.com and Whole Foods Market); "sustainable advantage due to business momentum, patent protection, visionary leadership, or inept competitors" (Wal-Mart, Amgen); and "smart management and good backing" (Intuit). Yet, while the Gardners tell readers not to pay attention to analysts' expectations and earnings statements, they proceed to break their own rules, explaining that, as companies get more profitable and grow into "Rule Makers," investors should look to more traditional measurements such as sales-to-debt ratios, growth, etc. The book is certainly more fun than most stock-picking manuals, and the insights into company management are amusing. In discussing the poor performance of Boston Chicken, the authors write, "Rather than being inept, Boston Market wound up playing chicken with companies whose managers were smarter and more experienced hands at this game." However, novice investors may find the advice more difficult to follow than previous Motley Fool books. Author tour.