Introduction: Picking Great Stocks Is Tough XV --
It's the Business that Matters XVI --
Long-Term Approach XVII --
Having the Courage of Your Convictions XVIII --
Let's Get Started XVIII --
Chapter 1 Five Rules for Successful Stock Investing 1 --
Have a Margin of Safety 3 --
Hold for the Long Haul 5 --
Chapter 2 Seven Mistakes to Avoid 13 --
Swinging for the Fences 14 --
Believing that It's Different This Time 14 --
Falling in Love with Products 15 --
Panicking When the Market Is Down 15 --
Trying to Time the Market 17 --
Relying on Earnings for the Whole Story 18 --
Chapter 3 Economic Moats 21 --
Evaluating Profitability 22 --
Building an Economic Moat 24 --
How Long Will It Last? 33 --
Chapter 4 Language of Investing 39 --
Where the Money Goes 41 --
Chapter 5 Financial Statements Explained 49 --
Statement of Cash Flows 66 --
Chapter 6 Analyzing a Company
Chapter 7 Analyzing a Company
Running the Business 110 --
Chapter 8 Avoiding Financial Fakery 113 --
Seven Other Pitfalls to Watch Out For 117 --
Paying Up Rarely Pays Off 126 --
Using Price Multiples Wisely 128 --
Cash Flow, Present Value, and Discount Rates 140 --
Calculating Present Value 143 --
Fun With Discount Rates 144 --
Calculating Perpetuity Values 147 --
Chapter 11 Putting It All Together 155 --
Advanced Micro Devices 155 --
Chapter 12 The 10-Minute Test 177 --
Does the Firm Pass a Minimum Quality Hurdle? 178 --
Has the Company Ever Made an Operating Profit? 178 --
Does the Company Generate Consistent Cash Flow from Operations? 178 --
Are Returns on Equity Consistently above 10 Percent, with Reasonable Leverage? 179 --
Is Earnings Growth Consistent or Erratic? 179 --
How Clean Is the Balance Sheet? 179 --
Does the Firm Generate Free Cash Flow? 180 --
How Much "Other" Is There? 180 --
Has the Number of Shares Outstanding Increased Markedly over the Past Several Years? 180 --
Beyond the 10 Minutes 181 --
Chapter 13 A Guided Tour of the Market 183 --
Chapter 14 Health Care 187 --
Economic Moats in Health Care 188 --
Generic Drug Companies 195 --
Medical Device Companies 200 --
Health Insurance/Managed Care 202 --
Chapter 15 Consumer Services 207 --
Companies We See Every Day 208 --
Chapter 16 Business Services 219 --
Economic Moats in Business Services 220 --
Technology-Based Businesses 221 --
People-Based Businesses 224 --
Hard-Asset-Based Businesses 226 --
It's All about Risk 233 --
Managing Credit Risk 233 --
Managing Interest Rate Risk 236 --
Economic Moats in Banks 239 --
Hallmarks of Success for Banks 241 --
Chapter 18 Asset Management and Insurance 247 --
Property/Casualty Insurance 257 --
Investor's Checklist: Asset Management and Insurance 263 --
Chapter 19 Software 265 --
Segments of the Software Industry 266 --
Economic Moats in the Software Industry 268 --
Software Accounting 101 269 --
Hallmarks of Success for Software Companies 271 --
What's Not to Like about Software? 273 --
Chapter 20 Hardware 275 --
What Drives the Hardware Industry 276 --
Hardware Industry Dynamics 277 --
Economic Moats in Hardware 279 --
Hallmarks of Success for Hardware Companies 282 --
How Media Companies Make Money 286 --
Economic Moats in Media 288 --
Publishing Profits 289 --
Broadcasting and Cable 290 --
Investing in the Entertainment Industry 291 --
Hallmarks of Success in the Media Sector 292 --
Risks in the Media Sector 293 --
Chapter 22 Telecom 295 --
Economic Moats in Telecom 300 --
Hallmarks of Success in Telecom 302 --
Chapter 23 Consumer Goods 305 --
How Companies Make Money in Consumer Goods 306 --
Key Strategies for Growth 306 --
What's Not to Like in Consumer Products 309 --
Economic Moats in Consumer Goods 310 --
Hallmarks of Success in Consumer Goods 313 --
Chapter 24 Industrial Materials 317 --
Problem with Cyclicality 318 --
Economic Moats in Basic Materials 320 --
Economic Moats in Industrial Materials 321 --
Hallmarks of Success in Industrial Materials 324 --
Finding Opportunities in Industrial Materials 329 --
Providing the Services 333 --
Impact of Commodity Prices 335 --
Economic Moats in Energy 337 --
Hallmarks of Success for Energy Companies 338 --
Risks in the Energy Sector 339 --
Chapter 26 Utilities 341 --
Electricity Primer 341 --
Regulation, Regulation, Regulation 343 --
Financial Characteristics of Utilities 344 --
Hallmarks of Success for Utility Companies 345 --
Risks in the Utilities Sector 346 --
