One Up on Wall Street: How to Use What You Already Know to Make Money in the Market Peter Lynch (1989)
Why Read It? • • •
An introduction to the stock market, and what to look for when investing your money, without relying on what the experts tell you. Presents the author’s proven strategies and principles on stock investing in a readable manner. Argues that small investors can research stocks better than most professionals, and that they should focus on quality, undervalued companies they can understand, and use common sense to identify those that will grow.
Getting Started One Up on Wall Street considers stock market investing from the standpoint of the amateur, arguing that the most successful type of investor does their homework, studies the fundamentals of a company, and then invests for the long term only in what they can understand. A bestseller, it provides an easy to understand and entertaining approach, and a set of fundamental rules that are easy to put into practice.
Author Peter Lynch (b. 1944) is a successful fund manager and stockpicker. He previously managed the Fidelity Magellan Fund, the top-ranked general equity mutual fund in America, and has written several bestselling stock investing books. He was previously an analyst, and also writes a column for Worth magazine.
Context • • • • •
Lynch is a proponent of stock analysis and value investing, and focuses on analyzing company fundamentals such as sales, earnings, and growth rates. Categorizes different types of companies—stalwarts, fast growers, slow growers, cyclicals, asset plays, and turnarounds—in terms of their investment opportunity. Asserts that amateurs can be as good or even better than investment professionals as long as they are alert for opportunity, and invest in what they know, using local knowledge as much as possible. Shows how difficult it is to time the market, so you should ignore the experts and think for yourself, focusing on quality stocks at reasonable prices. Discusses the qualitative aspects of investing, including portfolio balance, picking winners, and when best to buy and sell.
Impact • • • •
Advises that it is better to understand what kind of company to invest in and set specific investment objectives before purchase of a stock. Shows how to categorize the companies, and what strategy to use when investing in each of them. Informs on how to identify companies, how to analyze their prospects for growth, and how to continue monitoring potential growth. Argues that to beat the market you should choose a small portfolio of stocks that grow at a higher rate than the market average.
One Up on Wall Street: How to Use What You Already Know to Make Money in the Market
1 of 2 www.qfinance.com
Quotations “I continue to think like an amateur as frequently as possible.” “Stocks are most likely to be accepted as prudent at the moment they’re not.” “Only invest what you could afford to lose.”
More Info Book: •
Lynch, Peter. Beating the Street. New York: Simon & Schuster. 1993. A book aimed at all levels of investors, shows how to spot companies that will outperform.
See Also Finance Library • •
The Intelligent Investor Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies
To see this article on-line, please visit http://www.qfinance.com/asset-management-finance-library/one-up-on-wall-street-how-to-use-what-you-already-know-to-make-moneyin-the-market
One Up on Wall Street: How to Use What You Already Know to Make Money in the Market
2 of 2 www.qfinance.com
