More than one million copies have been sold of this seminal book on investing in which legendary mutual-fund manager Peter Lynch explains the advantages that average investors have over professionals and how they can use these advantages to achieve financial success.
America’s most successful money manager tells how average investors can beat the pros by using what they know. According to Lynch, investment opportunities are everywhere. From the supermarket to the workplace, we encounter products and services all day long. By paying attention to the best ones, we can find companies in which to invest before the professional analysts discover them. When investors get in early, they can find the “tenbaggers,” the stocks that appreciate tenfold from the initial investment. A few tenbaggers will turn an average stock portfolio into a star performer.
Lynch offers easy-to-follow advice for sorting out the long shots from the no-shots by reviewing a company’s financial statements and knowing which numbers really count. He offers guidelines for investing in cyclical, turnaround, and fast-growing companies.
As long as you invest for the long term, Lynch says, your portfolio can reward you. This timeless advice has made One Up on Wall Street a #1 bestseller and a classic book of investment know-how.
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A classic, from my favorite money geek
I am reading this book for the third time. The first was back in the nineties. I have read about eight books overall on investing but I keep coming back to this one. And I buy it again every time. And while many examples in this book are outdated, it still captures the essence of honest, straightforward, and indepth investment advice which can be profitable too. I think the biggest lesson I have extracted from this book is, do your own homework and believe in your abilities.
It took me over ten years to realize that not only is he right but his advice is invaluable. You have to do your own fundamental analysis to thrive in the market. And why do I do it, well to get back some of the tax I pay and to fight inflation.
Mutual funds are nothing more than glorified savings accounts that occasionally lose money. Money market funds became a zero sum game years ago and recently opened the door to turning negative. Municipal bonds are boring and options/futures/commodities are not for amateurs. Short selling requires margin accounts which are too not suitable for amateurs. Day trading and technical analysis are often shortcuts to bankruptcy court.
Having said that, take his advice on your own risk. Over the years I have followed his advice on numerous occasions. And while I did well overall, the instructions did not pan out every single time. This is not to say that the advice was wrong, it was just applied to the wrong company.
One time I bought a stock applying his formula at $2 and sold it at $16 making the downpayment for a mid size house in the high flying western Washington market. To a smaller extent that happened on 4-5 other occasions. Other times I lost small sums of money mostly because I missed parts of the story due to exuberance.
Again having said all that, I missed few valuable opportunities when I did not follow his advice. I was one of the first people to realize the value of amazon growing in my backyard and yet I never bought a share. Back in 1999 my boss told me you can use a credit card on amazon but not on most other places on the internet. That was my key to realize that amazon not only sells books and computers but is also the world's safe deposit box for information that other companies valued most. But I did not develop the story, and the years went by. Even as far as 2009, I could still have bought amazon for $12 a share and I did not. Look at it now trading in the $800 a share range. I just reminisce. I am not regretful or bitter because by not buying I did not lose anything after all.
Note: I have read his next two books, and they are not worth a dime. They are only commercial artifacts meant to capitalize on his name and reputation, probably by a publishing house greedy manager.
Beat the street
Best book EVER!