One of the best things about the member profiles on our Fool discussion boards is that members can highlight a book they recently read and enjoyed. On my profile -- linked at the bottom of this article -- you'll find The Davis Dynasty, which was recommended to me by Fool co-founder Tom Gardner.
I recommend that book to all investors because it views investing as a lifelong activity that makes up just a part of our lives -- a part that can have profound effects, both good and bad. True to its roots, the book balances the life of the Davis family from before the Great Depression all the way up to recent events.
Slow and steady wins the race
There are many tidbits of wit and wisdom that investors can take away from the book, but my personal favorite is "The Davis Double Play." For veteran value investors, the Davis Double will sound obvious. However, many folks might think the Davis Double is counterintuitive; the type of company that fits the bill is a consistent slow grower with growth rates of anywhere from 7% to 14% per year, instead of the high double-digit rates you expect out of companies such as Sirius Satellite Radio
The easiest double
Let's look at a hypothetical example: Nate's Widgets (Ticker: NATE). Nate's Widgets isn't a glamorous company, but its widgets are used in many places, and as moving parts they tend to wear out every few years and require replacement. It's a boring business, but it typically grows between 8% and 12% per year and management does a good job of allocating capital. The general investing public doesn't pay a good deal of attention to Nate's Widgets, and every so often the shares are trading at eight times earnings.
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