One Up On Wall Street: How To Use What You Already Know To Make Money In by Peter Lynch. Read online, or download in secure EPUB format. Editorial Reviews. Review. Anise C. Wallace The New York Times Mr. Lynch's investment From the Back Cover. THE NATIONAL BESTSELLING BOOK THAT EVERY INVESTOR SHOULD OWN. Peter Lynch is America's number-one money manager. Ebook is here - One Up On Wall Street by Peter Lynch The time of reading the book is well spent. I've already made several disastrous.
|Language:||English, Spanish, Arabic|
|Distribution:||Free* [*Register to download]|
Read "One Up On Wall Street How To Use What You Already Know To Make Money In" by Peter Lynch available from Rakuten Kobo. Sign up today and get $5. ONE UP on WALL STREET How to Use What You Already Know to Make Money in the Market. PETER LYNCH with John Rothchild. Simon Et Schuster. Ebook One Up On Wall Street: How To Use What You Already Know To Make Money In The Market By Peter Lynch,Pdf One Up On Wall Street: How To Use.
To browse Academia.
Skip to main content. You're using an out-of-date version of Internet Explorer. Log In Sign Up. Agra Sena. How To Use What You Already Know To Make Money In The Market By Peter Lynch 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.
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. A few tenbaggers will turn an average stock portfolio into a star performer.
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.
Lynch's investment record puts him in a league by himself. His mantra: Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.
Now, in a new introduction written specifically for this edition of One Up on Wall Street, Lynch gives his take on the incredible rise of Internet stocks, as well as a list of twenty winning companies of high-tech '90s. That many of these winners are low- tech supports his thesis that amateur investors can continue to reap exceptional rewards from mundane, easy-to-understand companies they encounter in their daily lives.
Investment opportunities abound for the layperson, Lynch says. By simply observing business developments and taking notice of your immediate world -- from the mall to the workplace -- you can discover potentially successful companies before professional analysts do. This jump on the experts is what produces "tenbaggers", the stocks that appreciate tenfold or more and turn an average stock portfolio into a star performer. The former star manager of Fidelity's multibillion-dollar Magellan Fund, Lynch reveals how he achieved his spectacular record.
Writing with John Rothchild, Lynch offers easy-to-follow directions for sorting out the long shots from the no shots by reviewing a company's financial statements and by identifying which numbers really count. He explains how to stalk tenbaggers 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 aboutinterest rates, in the long term anywhere from five to fifteen years your portfolio will reward you.
This advice has proved to be timeless and has made One Up on Wall Street a number-one bestseller. And now this classic is as valuable in the new millennium as ever. About the Author Peter Lynch managed the Fidelity Magellan Fund from to when it was one of the most successful mutual-funds of all time.
He then became a vice chairman at Fidelity and more recently has become a prominent philanthropist particularly active in the Boston area. John Rothchild was formerly a financial columnist for Time and Fortune magazines.
But, as an investor, the greater task for you is to know how much of that great product or service means to the company. One reason for this is that such growth cannot continue for long for reasons like higher competition that might want to take a pie of this growth opportunity.
The second reason is that if such a company still wants to push for higher growth for a few more years, it might have to infuse more capital in the business. This could either mean stretching the balance sheet by taking on debt or diluting equity by issuing new shares. Both these are bad omens for existing shareholders. What is more, one year of slowdown in growth can come as a shock to the stock market, and might lead to a sharp fall in the stock price. Distrust diversifications, which usually turn out to be diworsefications.
Experience suggests that most diversifications acquisitions of companies in the same area or a different one altogether are done to satisfy the egos of promoters, and not for real business reasons. And most of the diversifications end up as diworseifications. So watch out for companies that are blazing guns in this space. People get incredibly valuable fundamental information from their jobs that may not reach the professionals for months or even years. Not many small investors appreciate this, but it is one of the best ways they can pick great stocks.
Separate all stock tips from the tipper, even if the tipper is very smart, very rich and his or her last tip went up. Even if I love my fund manager for his stellar track record in managing my money, toeing all his stock ideas without doing my own research would be fraught with extreme risks. The stock he is recommending on CNBC might form just 0.
Now when this stock crashes, the fund manager would appear smart for taking a very small risk with it. While I'm on the subject, a clarification is in order. Charles Barkley, a basketball player noted for shooting from the lip, once claimed he was misquoted in his own autobiography. I don't claim to be misquoted in this book, but I've been misinterpreted on one key point.
Here's my disclaimer. Peter Lynch doesn't advise you to download stock in your favorite store just because you like shopping in the store, nor should you download stock in a manufacturer because it makes your favorite product or a restaurant because you like the food. Liking a store, a product, or a restaurant is a good reason to get interested in a company and put it on your research list, but it's not enough of a reason to own the stock!
Never invest in any company before you've done the homework on the company's earnings prospects, financial condition, competitive position, plans for expansion, and so forth. If you own a retail company, another key factor in the analysis is figuring out whether the company is nearing the end of its expansion phase -- what I call the "late innings" in its ball game.
When a Radio Shack or a Toys "R" Us has established itself in 10 percent of the country, it's a far different prospect than having stores in 90 percent of the country.
You have to keep track of where the future growth is coming from and when it's likely to slow down. Nothing has occurred to shake my conviction that the typical amateur has advantages over the typical professional fund jockey. In the pros enjoyed quicker access to better information, but the information gap has closed. Often these reports were mailed from headquarters, and it took several days for the information to arrive.
Today an array of analysts' reports is available on-line, where any browser can call them up at will.
News alerts on your favorite companies are delivered automatically to your e-mail address. You can find out if insiders are downloading or selling or if a stock has been upgraded or downgraded by brokerage houses.
You can use customized screens to search for stocks with certain characteristics. You can track mutual funds of all varieties, compare their records, find the names of their top ten holdings.
You can click on to the "briefing book" heading that's attached to the on-line version of The Wall Street Journal and Barron's, and get a snapshot review of almost any publicly traded company.
From there you can access "Zack's" and get a summary of ratings from all the analysts who follow a particular stock.
Again thanks to the Internet, the cost of downloading and selling stocks has been drastically reduced for the small investor, the way it was reduced for institutional investors in On-line trading has pressured traditional brokerage houses to reduce commissions and transaction fees, continuing a trend that began with the birth of the discount broker two decades ago.
You may be wondering what's happened to my investing habits since I left Magellan. Instead of following thousands of companies, now I follow maybe fifty.
I continue to serve on investment committees at various foundations and charitable groups, but in all of these cases we hire portfolio managers and let them pick the stocks.
Trendy investors might think the Lynch family portfolio belongs in the New England Society of Antiquities. These stocks have had a terrific run, and I'm still holding on to some of them. Selling long-term winners subjects you to an IRS bear market -- a 20 percent tax on the proceeds. I also own several growth companies that I've held since the s, and a few since the s. These businesses continue to prosper, yet the stocks still appear to be reasonably priced.
Beyond that, I'm still harboring an ample supply of clunkers that sell for considerably less than the price I paid.
I'm not keeping these disappointment companies because I'm stubborn or nostalgic. I'm keeping them because in each of these companies, the finances are in decent shape and there's evidence of better times ahead.
My clunkers remind me of an important point: You don't need to make money on every stock you pick. In my experience, six out of ten winners in a portfolio can produce a satisfying result. Why is this? Your losses are limited to the amount you invest in each stock it can't go lower than zero , while your gains have no absolute limit. All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don't work out.
Let me give you an update on two companies I don't own but that I wrote about in this book: Bethlehem Steel and General Electric. Both teach a useful lesson. I mentioned that shares of Bethlehem, an aging blue chip, had been in decline since A famous old company, it seems, can be just as unrewarding to investors as a shaky start-up. Bethlehem, once a symbol of American global clout, has continued to disappoint. Someday, Bethlehem Steel may rise again.
But assuming that will happen is wishing, not investing. In fact, the company that brings good things to life has brought more upside to its shareholders than I'd anticipated. Against the odds and under the savvy leadership of Jack Welch, this corporate hulk has broken into a profitable trot. Welch, who recently announced his retirement, prodded GE's numerous divisions into peak performance, using excess cash to download new businesses and to download back shares.
GE's triumph in the s shows the importance of keeping up with a company's story. downloading back shares brings up another important change in the market: the dividend becoming an endangered species. I write about its importance on page , but the old method of rewarding shareholders seems to have gone the way of the black-footed ferret. The bad part about the disappearing dividend is that regular checks in the mail gave investors an income stream and also a reason to hold on to stocks during periods when stock prices failed to reward.
It's true that interest rates are lower today than they were in , so you'd expect yields on bonds and dividends on stocks to be lower. As stock prices rise, the dividend yield naturally falls. Meanwhile companies aren't boosting their dividends the way they once did. Cutting a dividend or failing to raise it was a sign of trouble.
Reducing the supply of shares increases the earnings per share, which eventually rewards shareholders, although they don't reap the reward until they sell. If anybody's responsible for the disappearing dividend, it's the U. To help their shareholders avoid this double taxation, companies have abandoned the dividend in favor of the downloadback strategy, which boosts the stock price.
This strategy subjects shareholders to increased capital gains taxes if they sell their shares, but long-term capital gains are taxed at half the rate of ordinary income taxes. Speaking of long-term gains, in eleven years' worth of luncheon and dinner speeches, I've asked for a show of hands: "How many of you are long-term investors in stocks?
Long-term investing has gotten so popular, it's easier to admit you're a crack addict than to admit you're a short-term investor. Stock market news has gone from hard to find in the s and early s , then easy to find in the late s , then hard to get away from. The financial weather is followed as closely as the real weather: highs, lows, troughs, turbulence, and endless speculation about what's next and how to handle it. People are advised to think long-term, but the constant comment on every gyration puts people on edge and keeps them focused on the short term.
It's a challenge not to act on it. If there were a way to avoid the obsession with the latest ups and downs, and check stock prices every six months or so, the way you'd check the oil in a car, investors might be more relaxed. Nobody believes in long-term investing more passionately than I do, but as with the Golden Rule, it's easier to preach than to practice. Nevertheless, this generation of investors has kept the faith and stayed the course during all the corrections mentioned above.
Judging by redemption calls from my old fund, Fidelity Magellan, the customers have been brilliantly complacent. Only a small percentage cashed out in the Saddam Hussein bear market of Thanks to the day traders and some of the professional hedge fund managers, shares now change hands at an incredible clip. In , three hundred million shares traded was a hectic session on the New York Stock Exchange; today, three hundred million is a sleepy interlude and eight hundred million is average. Have the day traders given Mr.
Market the shakes? Does the brisk commerce in stock indexes have something to do with it? Whatever the cause I see day traders as a major factor , frequent trading has made the stock markets more volatile.
A decade ago stock prices moving up or down more than 1 percent in a single trading session was a rare occurrence. At present we get 1 percent moves several times a month. By the way, the odds against making a living in the day-trading business are about the same as the odds against making a living at race-tracks, blackjack tables, or video poker. In fact, I think of day trading as at-home casino care. The drawback to the home casino is the paper-work. Make twenty trades per day, and you could end up with 5, trades a year, all of which must be recorded, tabulated, and reported to the IRS.
So day trading is a casino that supports a lot of accountants. People who want to know how stocks fared on any given day ask, Where did the Dow close? I'm more interested in how many stocks went up versus how many went down. Never has this been truer than in the recent exclusive market, where a few stocks advance while the majority languish.
Investors who download "undervalued" small stocks or midsize stocks have been punished for their prudence. The same story was repeated in , where the elite group of winners skewed the averages and propped up the multitude of losers.
More than 1, stocks traded on the New York Stock Exchange lost money in This dichotomy is unprecedented. One industry that's teeming with small stocks is biotechnology. Recent developments inspire me to put in a good word for biotech -- not that amateurs should pick their biotech stocks out of a barrel, but that biotech in general could play the same role in the new century as electronics played in the last.
Today a long list of biotechs have revenue, and three dozen or so turn a profit, with another fifty ready to do the same.
One of the numerous biotech mutual funds might be worth a long-term commitment for part of your money.
Market commentators fill airspace and magazine space with comparisons between today's market and some earlier market, such as "This looks a lot like ," or "This reminds me of ," or when they're feeling very gloomy, "We're facing all over again. Then, in the bear market of , the Nifty Fifty fell percent! This unsettling decline disproved the theory that big companies were bearproof. If you owned the Nifty Fifty and held on to the lot for twenty-five years preferably you were stranded on a desert island with no radios, TV sets, or magazines that told you to abandon stocks forever , you're not unhappy with the results.
Though it took them a generation to do it, the Nifty Fifty made a full recovery and then some. Even if you bought them at sky-high prices in , your choice was vindicated. Once again, we've got the fifty largest companies selling for prices that skeptics describe as "too much to pay".
Whether this latter-day Nifty Fifty will suffer a markdown on the order of the fire sale is anybody's guess. History tells us that corrections declines of 10 percent or more occur every couple of years, and bear markets declines of 20 percent or more occur every six years.
Severe bear markets declines of 30 percent or more have materialized five times since the doozie. It's foolish to bet we've seen the last of the bears, which is why it's important not to download stocks or stock mutual funds with money you'll need to spend in the next twelve months to pay college bills, wedding bills, or whatever.
You don't want to be forced to sell in a losing market to raise cash.