Phil Town is a New York Times Best-Selling Author and Ex-Grand Canyon River Rafting Guide. He has a passion for teaching others how to invest and retire comfortably.
His book Rule #1 is a layman's guide to Warren Buffett-style investing, showing you how to find businesses that are on sale and make 15 percent returns on investment capital. It also explains how to identify the margin of safety, or the price a company is currently selling for compared to its intrinsic value.
The margin of safety principle is a basic strategy in most types of investing, and it's something you can use to protect yourself from risk and maximize your profits. The key is to buy a company at a deep discount to its intrinsic value, or "sticker price," while ensuring that it's a sound business.
He doesn't get too technical in his explanations of valuation and how to determine the margin of safety, and he's careful to explain what those terms mean to you. The problem is that he doesn't explain them very well and they can be very confusing to people without prior investment experience.
The book is a bit on the long side, and there are some topics that seem to be overly complex for beginners. However, I still think it's a valuable resource for newbies who want to learn some core principles of investing and understand how to apply them. I'd recommend this book to newbie investors and those who are interested in learning how to implement the margin of safety concept into their investment strategy.