One Up On Wall Street: How To Use What You Already Know To Make Money In The Market

Decided to pick up this book after reading Kiyosaki's bestseller, Rich Dad, Poor Dad. I've lost a bit of money in the market (2001 - 2004, but who hasn't?) and resolved to myself that I would learn more about investing. Kiyosaki's recommendation was for Lynch's other book, "Beating the Street" but "One Up on Wall Street" looked more interesting and timely. Given that I'm from the Boston area, I was already familiar with Peter Lynch and Fidelity Investments. Lynch's claim to fame was managing Fidelity's flagship mutual fund, Magellan, to stellar returns over many years. Lynch's advice in this book is based around the premise that most mutual fund managers while professionals, are often conservative in nature as compared to individual investors. They are bound to rules and regulations within their industry and trying to move a billion dollars worth of equities can be slow and tedious. Also their tendency to protect their capital and follow the pack means that most fund managers only perform adequately and don't really earn their pay. According to Lynch, an informed and educated individual investor can match or beat most fund managers. He has a much better chance of beating these professionals if he looks for undervalued stocks and stays in for the long-haul. Not that much different from Warren Buffet's investing mantra, it's all about assets and earnings. Lynch recommends going for the smaller growth stocks with strong fundamentals to really impact your portfolio since they are typically under most fund managers' radar screens. Once they are discovered, you can ride the stock up as they take positions. Finding these diamonds in the rough requires a bit of screening and research but all the tools and information are now available to the average investor on the internet. Oftentimes, these diamonds are right under your nose, businesses that you are familiar with as an every-day consumer. I really enjoyed Lynch's writing style, he mixes substantive graphs and real-life examples with self-deprecating wit and personal stories. It's comforting to know that even a investment guru like himself is capable of making (and learning from) mistakes. There are a handful of chapters and pages that are particularly useful providing broad guidelines and metrics that one should use when analyzing stocks. The bottom line is if you want to make money investing, you need to identify what type of investor you are, do your research and homework on companies, invest in stocks that meet your criteria/goals and keep an eye on things. The work required is not insignificant but if you don't do your homework, you're better off going to Las Vegas and betting on red. Overall, Beating the Street is not only an enjoyable read but a really wonderful overview of how to create a personal investment strategy. I tip my hat to Mr. Lynch for this great primer, all beginner investors should have this book on their bookshelf...

Peter Lynch’s One Up on Wall Street is great read for someone starting a stock portfolio, a financial analyst looking to move up in her career, or a senior hedge manager at a major corporation. Lynch breaks down the mystery surrounding investing and writes with a heartfelt and humorous tone that makes the stock market seem understandable. He speaks honestly about the companies he missed out on and the ones he did well in. His message throughout the book is that anyone can be successful in the stock market if they do their research, distance themselves from “insider tips” or noise, and are patient. Lynch argues that every person already has an insider advantage for investing based on the area they work in. For example, a dentist may notice that a certain brand of floss works much better and is much more prevalent than competing brands. Once these products are recognized, people should conduct research based on what they know, and continue to keep their eyes and ears open for potential investments. However, it’s important not to get caught up in the recommendations or local gossip about a company; this is simply noise, and more often than not will lead you astray. Lynch also recommends investing in companies that are boring and predictable; if you can’t explain what a company does in 2 minutes to a 10 year old, you don’t understand enough about the business to invest in it. Furthermore, it’s important to stay away from the hot and exciting companies, because these ones are more likely to fail than niche businesses in a specific industry. Categorizing stocks (stalwarts, slow growers, fast growers, asset plays, cyclicals and turnarounds) can help you to determine what metrics to looks for. Finally, plan to invest in the long term, and don’t get concerned about panics in the market. Even if you decide to invest later in a company’s life, you can still make a ten-bagger or better. My only criticism is that One Up on Wall Street was written in the 1980s, so the events and companies mentioned in the book are pretty dated. There were also fewer analysts and less information on companies in the 1980s, so it was easier to find businesses the stock market had over-looked. Still, the book is a great beginner’s guide to investing and has some timeless advice that anyone in the finance industry could find helpful.

Muy práctico y ameno de leer. Sus consejos son realmente útiles y animan a invertir con conocimiento sin necesidad de ser un profesional- que no siempre es una ventaja según el autor. Un clásico

So far this book is the best investment book i read!

Excellent info

Demasiado útil para nuevos inversionistas que desean entender las fuerzas que mueven el precio de las acciones. Ligeramente desactualizado en algunos aspectos pero vale la pena leerlo.

Good book