Rule #1 and Steve Madden Shoes

I wrote a post a while back about the book that I read called Rule #1 written by Phil Town. In the post I mentioned one of the companies that I had done a little bit of research on, Steve Madden, Ltd. Steve Madden Ltd sells mostly women's shoes and accessories. The ticker symbol for Steve Madden Ltd is SHOO.

Anyway my wife really likes their shoes and so I decided to research the company and run the numbers to see if it might be a good business to own (invest in). I did a little bit of research into the company as a whole, however I mostly just ran the numbers the way that Phil Town suggests in his book, Rule #1.

I wanted to see what price the stock would need to be at in order to earn a great return on my investment. The number that I came up with was at or around $14 dollars per share which was half of $28 per share (the real value or sticker price of the stock). That was on January 2nd, 2008. That was the same day that I did my first post on Rule #1 and the stock was trading at $19.52 per share.

Well since then the stock did go down into the $14 range. On January 14th it did bottom out at $14.62 per share which was probably a good time to buy. Since that day Steve Madden's stock has gone up to where it is at today which is $17.73 per share. I'll keep a close eye on SHOO to see if it gets up to "the real value" or "sticker price" of $28 per share.

Like I said in my earlier post on Rule #1 I intend to reread Rule #1 and post on each chapter of the book to better explain Phil Town's way of investing. At the same time I intend to follow Steve Madden Ltd. to see how the company and stock perform. I need to do a little more research on the company to qualify it as a Rule #1 business to own.

I also intend to develop my "watch list" of businesses to own (stocks to invest in) and will include those in my blog.