November 21, 2014

Rule #1 Investing Call Options

Call options are a fantastic way to generate cash flow and reduce basis on companies we already own. When we already own a company we call a call option a "Rule #1 Call Option." Let me briefly explain the call option definition.


What is a Call Option?

Essentially, a call option example is a coupon to get cheap milk. There's two sides to this coupon. There’s the grocery store, which is essentially selling the coupon at a very, very, cheap price and there's the buyer of the coupon who is getting a right to go buy this milk.


So, when we use the coupon between the store, the store has an obligation to sell the milk at a set price and the buyer of the coupon gets the right to buy that milk at a set price. That’s just a coupon and we’re used to using them all day long.


Read the full blog at


November 14, 2014

Bull Markets vs. Bear Markets

I sometimes get asked by investors what is a bull market and what is a bear market and how does it relate to Rule #1 Investing?  

Well let me put it in our terms…

We’re really excited about buying when there’s a lot of fear and we’re really excited about selling when there’s a lot of greed in the stock market. I’m going to tell you about how to take advantage of a bull and bear market.


Read the full blog at


November 06, 2014

Events That Cause Stock Prices to Change

This is a one of the most critical things I could ever show you about stock market prices… 

How is a stock price determined?

What are the reasons stocks go on sale?

The reason this is so essential is on the grounds that there's a colossal number of individuals who invest into stocks, who have been taught in business school that stocks never go on sale.

They are taught that the value of the business is determines the price of the stock.

Rule #1 investors don't believe that is genuine. Warren Buffett doesn't think it’s true, and the rest of the best financial specialists on the planet don't think it’s true either. 


Read the full blog at



October 30, 2014

The Best Companies to Invest in Have a Great CEO

In Rule #1 Investing, one of the things we search for when we're attempting to truly understand what the best organizations to invest in are, is the management of the organization. What we attempt to discover is a truly incredible CEO.


Take after these 3 tips to discover characteristics of a great CEO, who you would be glad to own a bit of the organization.


1) Is the CEO an Owner of the Company?


One of the main things we take a look at when we search for how to discover the best organizations to invest in is the manager of the organization.


A manager is some individual who established this company. These are people that moved into the business at such an early stage in the organization they are basically founders. Were searching for somebody who is connected to the business where they're kind of sitting on the same side of the table as us. They have a considerable measure of stock and they don't profit, unless we profit.


Read the full blog at



October 23, 2014

Responsible Investing With Your Own Personal Values

Our individual values are extraordinarily important to successful investing. Practically nobody discusses how to vote your values, or your heart to where your cash is going.

I think it is the most important vote in your life to put your cash into the things that you value and that you need to see in the world in the future.

Keep in mind that wherever you're putting your cash is what is going to develop on the planet…


Read the full blog post at



October 15, 2014

3 Common Stock Market Investing Myths Busted

There are regular myths about investing that to a degree can drive away the individual and make them think about whether investing is worth it.

Here are 3 myths about investing and the realities so you can develop your riches and achieve financial independence. And you can do it with Rule #1. 

Myth #1: You Have to be an Expert to Manage Money

You don't need to be a expert, all you must be is an expert at one little piece of the business sector. We call it being an inch wide and a mile deep…

What are the other two myths? Click the link below to find out.


Read the whole blog at



October 09, 2014

Value Investing With Rule #1

To most individuals, Rule #1 investors are value investors. They see us as attempting to purchase cheap stocks and group us in with the genuine "value" investors who are centered around sub-10 PE ratios. We're not that dogmatic. We hunt down "cheap" even in stocks with PE's in the 20's, yet its not out of line to order us with the main group that Ben Graham initially created. 

Applying Value Investing to Rule #1

We do for sure attempt to discover cheap stuff, although we prefer it to be wonderful cheap stuff, I'll buy less than wonderful stuff if: 

a) It's cheap enough, and

b) It's durable and consistent enough to determine (a).

I wrote in Rule #1 and Payback Time that I am searching for 10% growth rates in the Big Four and ROE's over 10% and no debt, I'm not stubborn about it. Yes, the Town Toolbox will paint scores that are short of ideal with red or yellow, however its a computer program, not a human brain, and until I can evaluate a finer approach to sort what's out there, those Rule #1 Scores will have to do for a starter.


The point here is to not let those Scores be an ender. Furthermore, the best approach to do that is, obviously, to make sure you know your industry and business.


Read the entire blog article on

October 01, 2014

Coattail Investing Strategies: Following the Best Investors

One of my most loved secrets about investing is the way to discover extraordinary organizations that are on sale. It's so basic, and it’s astounding that more individuals don't do it, however they don't. The secret is that we are going to coattail or duplicate the best investors.

When we utilize coat-tailing methods on the best financial specialists, we need to look and duplicate the individuals who we know have made gigantic rates of return in excess of 20 and 30 years of time. 

Read the full blog and watch the video at

September 24, 2014

Nouriel Roubini: 6 Worries That May Hurt Our Economic Recovery

Nouriel Roubini, economics proffessor at NYU, has these 6 things to caution us about in our economic recovery (from a June interview on CNN):

1. Developing markets will suffer as the US raises interest rates, worldwide interest for raw materials fades and China slows.

2. Ukraine-Russia clash turns into a war and includes Europe and the US; Russia cuts off gas supplies to Europe and sends it into a depression.

3. Asian patriotism prompts clash between Asian powers – a true shooting war...

Click HERE to read the full blog at

September 16, 2014

Deleveraging and Deflation: Something Scary This Way Comes

I recently completed reading Gary Shilling's book, The Age of Deleveraging, and Harry Dent's, The Demographic Cliff. Both writers are regarded as predictors of the real estate and economic meltdown in 2008. Both of them state that we have begun a deflation of our economic activity and banks cannot hide the issue for much longer.

Collapse Due to Baby Boomers Spending Less

Harry Dent builds his prediction with respect to the way that my era, the Baby Boomers, are heading into retirement and were stunned by the financial crisis in 2008 into forcefully saving money, as opposed to consuming.

Gary Shilling lands at the same conclusion for the same reasons and backs his figure up by indicating Japan, an economy that is in its third decade of collapse for comparative reasons, is similar to what we're going to encounter; a maturing populace that is not spending as much…

Click here to read the full blog post at

Sign Up!

  • Sign up to get Phil's calculators, newsletter, paper trading journal, and more exclusive resources.

Get Started

  • How to invest like Phil Town:
    1. Buy and read RULE #1.
    2. Listen to Phil Town's podcast.
    3. Watch video of Phil Town talking about RULE #1 on MSNBC and CNBC.
    4. Learn how to use this blog as an educational supplement to Phil's books.
    5. Study these must-read posts.
    6. Sign up to access Phil's calculators and other FREE investing tools.

Search this Site

  • Search Phil Town's Blog:

    Phil Town's Blog