One Up on Wall Street

The reasons I recomand this book

This is a book I often recommend “Primer books for investing in the Stock Market“, and the self-preface of the book is well written. The reasons to recommend Peter Lynch’s book “One Up on Wall Street” are as follows:

  • There is actual endorsement of his own achievements: During the 13 years that Peter Lynch was the fund manager of Magellan Funds, the fund’s annualized rate of return reached 29.2%, which is an eyes-popping and rare investment performance. He was named the world’s best fund manager by Time magazine and the most legendary fund manager in history by American fund rating companies.
  • Life-oriented stock selection and investment methods are suitable for everyone: use ordinary people’s various life scenarios to lead everyone into the world of stock investment. Let readers be led to the fascinating world of stock market investment without knowing it. After reading it, there will be a sense of impulse that others can, and so can I.
  • Peter Lynch’s books are easy to read: He has published three books:
    • One Up On Wall Street
    • Beating the Street
    • Learn to Earn
  • All of these three books are very popular. His book has a characteristic, very colloquial, vivid and easy to read. Basically, there is no need to have any investment background, nor will it talk about any advanced knowledge, as long as anyone who read newspaper can read it as well.

some important investing concepts in the book

Peter Lynch has a great influence on me. He mentioned some important investment concepts in this book:

  • Retail investors have great advantages, which is the same as my opinion; readers can refer to my blog article “The advantages of retail investors“.
  • “Investing in stocks is an art, not a science.”
  • “Invest in what you know.” Don’t touch any investment in a field that you don’t understand. Everyone must have their own circle of competence and make good use of the knowledge you already know. As long as you go to the street to buy things, even if you don’t go out and play online games at home all day, your ability circle is the electric toy industry. It is easy to succeed by choosing stocks and investing within the circle of competence. Start with the surroundings where you work.
  • Long-term investment, tracking the corporate dynamics of the stocks you buy, everyone has the opportunity to choose ten times the ten bases; ignore short-term market fluctuations.
    • “When you’re a long-term investor, time is on your side.”
    • “In my investing career, the best gains usually have come in the third or fourth year, not in the third or fourth week or the third or fourth month.”
    • “The long-term returns from stocks are both relatively predictable and also far superior to the long-term returns from bonds.”
  • “Already you’ve found out whether you’re dealing with a slow grower, a stalwart, a fast grower, a turnaround, an asset play, or a cyclical.”
  • Focus on facts, don’t believe in experts, don’t believe in investment talent, don’t believe in mathematical analysis, don’t believe in any brand, don’t believe in any predictions, or various theories.
  • “All the math you need in the stock market you get in the fourth grade.” Neither the random walk theory nor the efficient market hypothesis can withstand testing.
  • Avoid hot stocks; focus on Wall Street or companies that most people have not yet discovered potential. Companies that are not on the Wall Street radar, no one pays attention, are boring, ordinary, unpopular companies, and engage in boring business, sometimes they are better investment targets. Enterprises should focus on their own business, and investors should avoid enterprises with diversified operations. Our goal is to find companies that are just starting to make money and prove that their business model is successful and has potential.
  • Investing takes time and hard work. At least spend a few hours a week researching your holdings, and adding up the dividends received is not considered homework. Buying stocks by buying a house is like buying a car with a tire. Ben Graham also said: “Investors should purchase stocks like they purchase groceries, not like they purchase perfume.”
  • The continued repurchase of companies and the purchase of stocks by their own management are positive signs.
  • If you cannot convince yourself that “the stock price drops by 25%, I will buy.” and give up “the stock drops by 25%, and I will sell.” It is best not to buy stocks.

Peter Lynch’s another famous article

As I mentioned in the postscript chapter of my book “The Rules of Super Growth Stocks Investing”, Peter Lynch wrote a famous article for retail investors called “Use Your Edge” in Worth magazine in March 1997. In this article, he listed some investment principles for retail investors. I sincerely suggest that those who are interested can spend some time and study hard, and there will be gains.

Disclaimer

  • The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
  • I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.

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