Brinks Truck - Serialization 2

Preface

Published on September 11, 2004 By Jay Walker In Business

This is a serialized version of an internet book entitled:

“The Brink’s Truck Burst Open On Wall Street! A Holistic Approach to Finding The Easy Money In Common Stocks”

This is Serialization 2. To find Serialization 1, please go HERE, while Serialization 3 is posted HERE.

This book will be serialized over a several month period. It will interest people who want to know whether the price of a stock is fair, or priced too high. It will aid you in outperforming the general stock market, by helping you understand what the value is of the company that underlies its stock, and by then relating that to its stock price. However, while many of these types of books are difficult to understand, this one is written in terms that most lay people should be able to understand, rather than using obscure language and difficult to understand terminology.

Insofar as the people go, this is a work of fiction. All names in this publication are fictitious and any resemblance to any person living or dead is coincidental. Copyright 1998 and 2004 by Jay Walker. All rights reserved.

Note that this book is available in its entirety via a pdf file. A comprehensive Excel spreadsheet, beta version, is also available, which performs many of the tedious, but necessary, calculations required to analyze a company and its stock price. This spreadsheet is designed to accompany the book.

The cost is $8 for the book, and $12 for the spreadsheet (USD). Please email me at remarkablesuccess@hotmail.com to order yours.

Serialization 2 - Brinks Truck

Preface

This book is about how to outperform the stock market, at reduced risk. It is written in a straightforward style so the average person will be able to use the same tools and techniques used by sophisticated Wall Street investors.

Yet it also goes beyond that, by helping you understand why some investors are consistently able to outperform the stock market. By showing you fundamental elements within businesses that these successful investors consider critical, it provides insight into why these investors are able to outperform their peers. The concepts outlined in this book have been distilled from the teachings of the world’s most successful investors, including Warren Buffett, Peter Lynch, Philip Fisher, Benjamin Graham and others. In this book, you will find three main ideas or themes:

Firstly, that buying excellent businesses is the foundation of outperforming the broader stock market.

Secondly, you’ll learn how to extract the information you need from corporate annual reports, so that you can determine if that particular business is an excellent business. This step is often missing in popular stock market books.

Finally, you’ll be shown three different ways to value a business and its stock. This element – how to value a stock – is also often missed in popular stock market books. However, this step is crucial to market outperformance, in order to ensure that you are paying a price that will earn you a satisfactory rate of return. One of the valuation techniques you’ll learn is the Discounted Cash Flow method, a valuation methodology consistently used by multi-billionaire investor Warren Buffett.

These three ideas or themes are interwoven so that you’ll understand both the importance of them and how to apply them when searching out businesses to add to your own stock portfolio.

In order to apply the valuation methods shown in the last half of the book, a financial calculator is useful so that you can complete similar valuations on stocks for your own portfolio. The calculator I recommend, and which forms an integral part of the second half of this book, is the ‘Texas Instruments BAII Plus’. It’s available at many stationery stores, university or college bookstores, or even at the local Wal-Mart. It will perform all the calculations we need, such as calculating rates of return, or the effect that inflation has on money over time. It simplifies the task of analyzing corporate financial statements, and is recommended for those who are going to apply the valuation methods shown in this book in constructing their own stock portfolio. However, any financial calculator will perform the same functions. Please note that the spreadsheet mentioned above will perform all of the required calculations, with greater convenience and summary functions.

In closing, you’ll note that this isn’t a 300 or 400 page tome. That’s because I wanted to give you the essence of what’s critical, while leaving out the palaver too often found when simply trying to ‘fill the pages’. I hope you’ll find this book exceptionally useful, and to my regular investment newsletter readers, I thank you for encouraging me to take the plunge.

Jay Walker

Serialization 3.

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