Buy wonderful companies at reasonable prices, and improve your odds in the stock market.

Just as moats around medieval castles kept the opposition at bay, economic moats protect the high returns enjoyed by the world’s best companies. If you can identify companies with moats and purchase their shares at reasonable prices, you'll greatly improve your odds of doing well in the stock market.

Economic moats are the basis for Pat Dorsey’s The Little Book That Builds Wealth, as well as strategies by some of the world’s most successful investors (including Warren Buffett, who actually coined the phrase).

The Little Book That Builds Wealth helps you build a more durable portfolio by answering a simple question: What prevents a smart, well-financed competitor from moving in on a company’s turf?

You’ll find out:

• Why great products, management, and market share may not add up to a wide moat
• How to identify a wide economic moat when you see one
• When to buy these stocks at the right price, and when to sell them

Chapter 1: Economic Moats
What’s an economic moat, and how will it help you pick great stocks?

Chapter 2: Mistaken Moats
Characteristics that masquerade as moats, misleading investors.

Chapter 3: Intangible Assets
Those attributes you can’t pull off a shelf, but they sure are valuable.

Chapter 4: Switching Costs
Making it hard for customers to change providers can mean a bigger moat.

Chapter 5: The Network Effect
Competitive advantages that grow out of bringing people together.

Chapter 6: Cost Advantages
Sustainably lower expenses can result in sustainable profits over time.

Chapter 7: The Size Advantage
Knowing when bigger actually is better, and why it’s all relative.

Chapter 8: Eroding Moats
How growth or changes in the market can shrink a moat.

Chapter 9: Finding Moats
The best places to look, and what you should be looking for.

Chapter 10: The Big Boss
Why management matters less than you think.

Chapter 11: Where the Rubber Meets the Road
Examples of the three-step evaluation process.

Chapter 12: What's a Moat Worth?
The importance of valuation and buying at the right price.

Chapter 13: Tools for Valuation
Find out what tools are right, and right for you.

Chapter 14: When to Sell
Selling at the right time, for the right reasons.

Pat Dorsey is director of equity research for Morningstar and author of The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market and The Little Book that Builds Wealth: The Knockout Formula for Finding Great Investments. He played an integral part in the development of the Morningstar Rating^TM for stocks, as well as Morningstar's economic moat ratings. Dorsey holds a master's degree in political science from Northwestern University and a bachelor's degree in government from Wesleyan University. He also holds the Chartered Financial Analyst (CFA) designation. Dorsey appears weekly on the "Bulls & Bears" show on the Fox News Channel.

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