One Up On Wall Street: How To Use What You Already Know To Make Money In The Market Paperback – Illustrated, 3 April 2000
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Peter Lynch is America's number-one money manager. His mantra: Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.
Now, in a new introduction written specifically for this edition of One Up on Wall Street, Lynch gives his take on the incredible rise of Internet stocks, as well as a list of twenty winning companies of high-tech '90s. That many of these winners are low-tech supports his thesis that amateur investors can continue to reap exceptional rewards from mundane, easy-to-understand companies they encounter in their daily lives.
Investment opportunities abound for the layperson, Lynch says. By simply observing business developments and taking notice of your immediate world -- from the mall to the workplace -- you can discover potentially successful companies before professional analysts do. This jump on the experts is what produces "tenbaggers", the stocks that appreciate tenfold or more and turn an average stock portfolio into a star performer.
The former star manager of Fidelity's multibillion-dollar Magellan Fund, Lynch reveals how he achieved his spectacular record. Writing with John Rothchild, Lynch offers easy-to-follow directions for sorting out the long shots from the no shots by reviewing a company's financial statements and by identifying which numbers really count. He explains how to stalk tenbaggers and lays out the guidelines for investing in cyclical, turnaround, and fast-growing companies.
Lynch promises that if you ignore the ups and downs of the market and the endless speculation aboutinterest rates, in the long term (anywhere from five to fifteen years) your portfolio will reward you. This advice has proved to be timeless and has made One Up on Wall Street a number-one bestseller. And now this classic is as valuable in the new millennium as ever.
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Most helpful customer reviews on Amazon.com
Now, back to the book. This book is known for emphasizing some of the advantages that individual investors have (say, over institutional ones) when it comes to finding investment opportunities. One of these advantages relates to the fact that -due to mandate or sheer size- institutional managers cannot even start considering investing in small caps. This leads to a second advantage, which is that individual investors can find very attractive opportunities by just looking around them. This advantage is even more true today considering the easy access everybody has to stock and company related data.
This is one of those books where, If you randomly pick a paragraph on any page, it will find a way to keep you engaged. The writing style is just too good. And I think it is that good because this man is pure wisdom. He could sit in front of me for the rest of my life and that probably would not be enough time for him to pass on all his knowledge. He was an investor, a trader, an equity analyst, a portfolio manager, and a businessman all in one. Incredible!
The three sections I found most valuable are these:
1- company/stock classification (slow/fast growers, stalwarts, turnarounds, etc)
2- description of the characteristics of a fast grower or 10-bagger.
3- details of the effect of interest rates on the markets’ historical P/E ratio.
Do yourself a favor a read this book. You won’t regret it.
His main premise is that individuals, such as me and you, take part in the economy and are well aware of new trends and investing opportunities. By being aware and doing diligent homework before investing, you can find numerous "baggers" - stocks which increase by multiples over time - that can make you quite wealthy. In fact, Lynch points out this gives the average person an edge against professional investors, thus giving the book it's title. Throughout the book he details his ideas and methods for analyzing companies and serves as a good foundation to the value oriented investors. The author also seems to have a good sense of humor (like Buffett) which makes the book joyful to read.
The only downside of the book which I can find is that it is a bit outdated as it was written decades ago. Much has happened since then such as the dotcom bubble and the 2008 recession. But I find this a minor issue as the lessons and techniques detailed in the book are general enough to apply broadly. It in no way takes anything away from the quality of the book.
I still think its a great book, but he is giving the average individual investor too much credit on being able to interpret what the financial statements are really saying and how to think about valuation of the stock. I really like his take on being aware of what you are seeing and hearing around you (not on TV or the web) as you walk through the mall to see the hot stores with the crowds, listen to your kids on hot products or fashions, etc. But once you get these ideas and then analyze the financial statements and valuation, most will want to also bounce the idea off a professional (financial adviser) or at least use a quantitative service like zacks.
That said, much of this book is repeated in his other books.
It is a fun, interesting, and potentially useful book if you are interested in high level investing. This book has less useful advice for the small investor than some of this other books.
Mr. Lynch's writing style is engaging and interesting.
All in all, a good book.