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7 of 7 people found the following review helpful
5.0 out of 5 stars Moat is King
Warren Buffett coined the term moat which represents a competitive advantage that a company can possess over its competitors. Pat Dorsey did a great job explaining what a moat is and categorized it into four categories: Intangible Assets, Switching Costs, Network Effect, and Cost Advantages. Whenever I talk to a potential client or give a seminar on investing, I always...
Published on 15 Nov. 2009 by Mariusz Skonieczny

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1 of 3 people found the following review helpful
3.0 out of 5 stars Good review of some basic concepts
This book does a good job at covering "the moat" concept, one of the basic concepts when it comes to identifying competitive advantages in a company. However, I am not sure what its purpose is, because I do not think that this book would bring any new information to any "stock picker".
If you are looking for a review of some basic concepts, that you...
Published on 9 Dec. 2012 by Maistracc


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7 of 7 people found the following review helpful
5.0 out of 5 stars Moat is King, 15 Nov. 2009
By 
Mariusz Skonieczny "Author" (classicvalueinvestors com) - See all my reviews
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This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
Warren Buffett coined the term moat which represents a competitive advantage that a company can possess over its competitors. Pat Dorsey did a great job explaining what a moat is and categorized it into four categories: Intangible Assets, Switching Costs, Network Effect, and Cost Advantages. Whenever I talk to a potential client or give a seminar on investing, I always talk about moats stemming from four sources that Mr. Dorsey explained. I absolutely loved this book.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
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12 of 13 people found the following review helpful
5.0 out of 5 stars Changed the way I thought about investment, 4 Aug. 2010
By 
M. Carter - See all my reviews
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This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
I have been heavily influenced by the writings of Ben Graham. Consequently, I have tended to own a lot of low price-earnings, low price-to-book goo, and often been disappointed with the results - cheap stocks that went on to get even cheaper. It was time for me to consider a better approach: higher quality companies at reasonable prices (or very cheap, if they're available) - the Warren Buffett approach. Everybody, of course, wants to be the next Warren Buffett. He talks extensively about wonderful businesses, but says little about how these things are identified.

This is where this Little Book comes in. It talks about "moats" (which Greenwald refers to as "franchises", or which you or I could call simply "mini-monopolies"), and tries to identify the difference between true moats and false moats (i.e. ones that are currently earning high returns on capital, but whose advantage is likely to be quickly eroded though competition). He also reviews the sectors in which moats are likely to be found (he likes financials quite a lot). He identifies the types of moats (for example, those involving high switching costs to the consumer). He also suggests looking at numbers like ROE (return on equity), ROA (Return On Assets) and ROIC (Return On Invested Capital) as a way of identifying potential investments. So you could, for example, use a stock screener to screen for high ROE as a starting point. He also covers establishing a suitable buy price, and a sell decision.

The book goes a long way to giving practical advice into analysing a situation, and has more substance than a lot of the generic waffle that you hear bandied about Buffett's investing style. This book has certainly been food for thought for me. It can't, of course, turn you into a Buffett superinvestor overnight - much as we'd all like. You still need a qualitative feel for companies that no book can really give you. The good news is that this qualitative understanding is an accretive process that can be obtained by reading lots of accounts and business newspapers/magazines.

I suggest reading this book, together with Intelligent Investor by Ben Graham, and The Little Book That Beats The Market by Joel Greenblatt. You might also want to perform a web search for Li Lu, who has recently been identified officially for the role of Berkshire Hathaway's chief investment officer.
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2 of 2 people found the following review helpful
5.0 out of 5 stars The most interesting investment book I've read this year, 11 Jun. 2012
By 
GUY'S BOOKS (BEDFORDSHIRE, UK) - See all my reviews
This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
This is the most interesting book on investment that I've read this year. Most investment books focus on financial analysis of past results, while the value of an investment comes from the future cash flow, as Dorsey reminds us.
Finding a business with a long term competitive advantage, or "moat", is the focus of this book, and it's well explained.
I only have one criticism: this book is too small, there is still a lot to write about how to find a business with a large moat.
I look forward "the BIG book that builds wealth"!
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5.0 out of 5 stars simple yet powerful, 29 Mar. 2014
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A nice presentation of some well known ideas. But a nice reminder of what is important and what is not.
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2 of 3 people found the following review helpful
4.0 out of 5 stars A sensible approach to picking stocks, 2 Nov. 2009
By 
Rolf Dobelli "getAbstract" (Switzerland) - See all my reviews
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This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
How do you pick stocks? Do you pay attention to earnings? Chart patterns? Growth potential? Your Uncle Morty? Instead of all that, use the same basic system that investment guru Warren Buffett perfected: Look for solid profitable companies that own a piece of the market, buy their stock and hold it a long time. Morningstar, the investment research company, uses the same approach to analyze and rate stock values. Its director of equity research, Pat Dorsey, explains its stock analysis system in this small volume. The stock selection system calls for seeking companies with protected unique advantages, called "economic moats." What sounds straightforward in theory may not be as easy in practice: Finding a structurally protected stock today is not necessarily a simple stroll across the drawbridge. Still, getAbstract finds Dorsey's presentation succinct and readable, and recommends it to investors who are not yet familiar with value investing and similar approaches.
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4.0 out of 5 stars Good overview, 18 Mar. 2015
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This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
Good introduction to how some companies generate above market returns over long periods of time. However, having read the book, I'm not sure if I learnt enough to look at a company and determine how strong it's moat is or how long it will last.
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5.0 out of 5 stars Five Stars, 21 April 2015
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This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
Fantastic book!
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0 of 1 people found the following review helpful
5.0 out of 5 stars A Must Read, 2 Aug. 2010
By 
Austin Gorham (uk) - See all my reviews
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This review is from: The Little Book That Builds Wealth: The Knock-out Formula for Finding Great Investments (Little Books. Big Profits) (Hardcover)
Simple and easy flow of writing with thourough explanations given of technical side, thus enabling a complete novice to understand the subject.
This book should be in every investors library!
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1 of 3 people found the following review helpful
3.0 out of 5 stars Good review of some basic concepts, 9 Dec. 2012
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This book does a good job at covering "the moat" concept, one of the basic concepts when it comes to identifying competitive advantages in a company. However, I am not sure what its purpose is, because I do not think that this book would bring any new information to any "stock picker".
If you are looking for a review of some basic concepts, that you as a reader should already be familiar with, this is a good book. If, on the other hand, you are discovering something new in this book, you should not be picking individual stocks in the first place and should be better off by just investing in some kind of tracker fund.
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