Rule #1 Finance Blog

With Investor Phil Town

RULE #1 QUESTION OF THE WEEK: THE NEW RULE #1 SEARCH

Q: Will the new Investools Rule #1 Search turn up companies that have solid moats?  I thought I saw some commodities in there.

A: Moat, Meaning, Management and Margin of Safety still all need to be evaluated.  The search as defined by Investools is trying to look for consistency.  It's a beginning and gives us a starting point that is interesting to play with.  The businesses that made the cut look quite good — even the commodity businesses.   (But remember that commodities don't have moats, and therefore don't pass the 4Ms.)

The search results are a starting point, whatever search you use.  The idea is to reduce 14,000 possible businesses to a handful that you can really dig in on.  This search gives us a different pile to dig through than other searches Investools has and is in the direction that we want to go.