Pat Dorsey – The 5 rules for successful stock investing

I first came across Pat Dorsey when I read The Little Book That Builds Wealth. Prior to that I had no idea about who Pat was. I was blown away by that book. It explained some of the most important issues in investing in the simplest possible language. That is why, when I came across The Five Rules for Successful Stock Investing I had high expectations from it. The book did not disappoint.

The book is divided into three broad areas. First, Pat explains the concept of ‘economic moats’ and how they matter for our investing decisions. In the second segment, the discussion moves to how accounting works and how we can value common stocks. Through practical example, the valuation process is explained in very simple terms. Finally, comes the most interesting part of the book (to a more experienced analyst). In this segment, Pat along with Morningstar’s other analysts gives short primers on investing in different sectors ranging from banking to consumer and telecom. In each segment they point out the types of companies present and how profitable they are. They also try to explain the business models and key things to look out for.

All in all, I thought the book is a very useful one for both beginners and experienced analysts. A lot of unique insights and takeaways for the grab.


Asif Khan, CFA

Asif Khan is presently a Research Analyst (Financial Sector) for Exotix which is a frontier market focused investment bank. He has more than 6 years of work experience as equity analyst in both buy and sell side roles across Asian frontier markets. Asif is a CFA Charterholder and has a dual major in Finance & Economics from North South University.

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