Introduction: Picking Great Stocks Is Tough -- It's the Business that Matters -- The Long-Term Approach -- Having the Courage of Your Convictions -- Let's Get Started -- The Five Rules for Successful Stock Investing -- Do Your Homework -- Find Economic Moats -- Have a Margin of Safety -- Hold for the Long Haul -- Know When to Sell -- Seven Mistakes to Avoid -- Swinging for the Fences -- Believing that It's Different This Time -- Falling in Love with Products -- Panicking When the Market Is Down -- Trying to Time the Market -- Ignoring Valuation -- Relying on Earnings for the Whole Story -- Economic Moats -- Evaluating Profitability -- Building an Economic Moat -- How Long Will It Last? -- Industry Analysis -- The Language of Investing -- Where the Money Goes -- Practical Financials--The Statements in Use -- Financial Statements Explained -- The Balance Sheet -- The Income Statement -- The Statement of Cash Flows -- Analyzing a Company--The Basics -- Growth -- Profitability -- Financial Health -- The Bear Case -- Analyzing a Company--Management -- Compensation -- Character -- Running the Business -- Avoiding Financial Fakery -- Six Red Flags -- Seven Other Pitfalls to Watch Out For -- Valuation--The Basics -- Paying Up Rarely Pays Off -- Using Price Multiples Wisely -- Say Yes to Yield -- Valuation--Intrinsic Value -- Cash Flow, Present Value, and Discount Rates -- Calculating Present Value -- Fun With Discount Rates -- Calculating Perpetuity Values -- Margin of Safety -- Putting It All Together -- Advanced Micro Devices -- Biomet -- The 10-Minute Test -- Does the Firm Pass a Minimum Quality Hurdle? -- Has the Company Ever Made an Operating Profit? -- Does the Company Generate Consistent Cash Flow from Operations? -- Are Returns on Equity Consistently above 10 Percent, with Reasonable Leverage? -- Is Earnings Growth Consistent or Erratic? -- How Clean Is the Balance Sheet? -- Does the Firm Generate Free Cash Flow? -- How Much "Other" Is There? -- Has the Number of Shares Outstanding Increased Markedly over the Past Several Years? -- Beyond the 10 Minutes -- A Guided Tour of the Market -- Where to Look -- Health Care -- Economic Moats in Health Care -- Pharmaceuticals -- Generic Drug Companies -- Biotechnology -- Medical Device Companies -- Health Insurance/Managed Care -- Consumer Services -- Companies We See Every Day -- Restaurants -- Retail -- Business Services -- Outsourcing Trend -- Economic Moats in Business Services -- Technology-Based Businesses -- People-Based Businesses -- Hard-Asset-Based Businesses -- Banks -- It's All about Risk -- Managing Credit Risk -- Selling Liquidity -- Managing Interest Rate Risk -- Economic Moats in Banks -- Hallmarks of Success for Banks -- Asset Management and Insurance -- Asset Management -- Life Insurance -- Property/Casualty Insurance -- Investor's Checklist: Asset Management and Insurance -- Software -- Segments of the Software Industry -- Economic Moats in the Software Industry -- Software Accounting 101 -- Red Flags -- Hallmarks of Success for Software Companies -- What's Not to Like about Software? -- Hardware -- What Drives the Hardware Industry -- Hardware Industry Dynamics -- Economic Moats in Hardware -- Hallmarks of Success for Hardware Companies -- Media -- How Media Companies Make Money -- Economic Moats in Media -- Publishing Profits -- Broadcasting and Cable -- Investing in the Entertainment Industry -- Hallmarks of Success in the Media Sector -- Risks in the Media Sector -- Telecom -- Telecom Economics -- Economic Moats in Telecom -- Hallmarks of Success in Telecom -- Consumer Goods -- How Companies Make Money in Consumer Goods -- Key Strategies for Growth -- What's Not to Like in Consumer Products -- Economic Moats in Consumer Goods -- Hallmarks of Success in Consumer Goods -- Industrial Materials -- The Problem with Cyclicality -- Economic Moats in Basic Materials -- Economic Moats in Industrial Materials -- Hallmarks of Success in Industrial Materials -- Red Fl ags -- Finding Opportunities in Industrial Materials -- Energy -- From the Ground -- To the Pipelines -- To the Refineries -- To the Consumers -- Providing the Services -- The Impact of Commodity Prices -- Economic Moats in Energy -- Hallmarks of Success for Energy Companies -- Risks in the Energy Sector -- Utilities -- Electricity Primer -- Regulation, Regulation, Regulation -- Financial Characteristics of Utilities -- Hallmarks of Success for Utility Companies -- Risks in the Utilities Sector -- The Big Picture.
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