Title: One Up On Wall Street
Author: Peter Lynch
The subtitle of investment superstar Peter Lynch’s book tells you straight away what the premise is – ‘How to use what you know to make money on Wall Street’. What the author is advocating here sounds simple enough, but as with all things to do with investing, there are a million underlying nuances that only the professionals know. Peter Lynch tries to address this by relating some of the knowledge he’s gained over 40+ years in the investment industry.
Whilst not particularly well-known amongst the wider population, inside investing circles Peter Lynch is regarded as one of the worlds greatest money managers. He achieved his legendary status as portfolio manager of the multi-billion-dollar Fidelity Magellan Fund, which was the best performing fund in the world under his leadership from May 1977 to May 1990.
The book centres around his opinion that the average investor can become an expert in their own field, and can pick winning stocks just like Wall Street professionals, simply by doing a little research. Investment opportunities abound for the layperson, Lynch says. By simply observing business developments and taking notice of your immediate world – from local shops to the workplace – he argues that you can discover potentially successful companies before the professional analysts do.
Lynch first coined the phrase ‘multi-bagger’ as a way to describe the successful companies that he invested in during his time at Fidelity. Some were ’ten baggers’ that increased in value tenfold, some were twenty baggers, others even more, and Lynch firmly believe that finding these diamonds in the rough is something that anyone can do. All it takes is a little insight into what’s going on in the real world. And who knows better about what’s happening out there than you, the reader!
Easy to read but full of technical tips too
He offers easy-to-follow directions for sorting out the winners from the losers by reviewing a company’s financial statements and by identifying which numbers really matter. He then goes on to explain how to search for the ten baggers 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 about interest rates, in the long-term (anywhere from five to fifteen years) your portfolio will reward you.
I found the book not only easy to read, but it also has a wealth of good old common sense that has obviously been honed by someone who’s become an expert in their field over many years. He isn’t shy of telling you what his mistakes have been in order that you can learn from them, and he’s keen to tell you how he made some of his best investments. For instance, you might be surprised to learn that he made one of his best investments with a company that makes ladies tights, simply from listening to his wife one day telling him how good they were!
If you really want to take your investing to the next level, then you surely can’t go wrong by reading the words of one of the greatest investors of all time. My advice? Buy the book. The knowledge inside could maybe make you an investing superstar one day too!