Contents of this article
“One Up on Wall Street” is a book you cannot miss if you are passionate about investing and business, or an investor looking for a good book in this field to build your knowledge. It is one of the world’s classic business books, recommended by many famous businesspeople. The book contains all the investing experience and secrets of Peter Lynch – one of America’s top money managers.
As a new investor, you may often ask: “I want to put some money into the market, but where should I start?” There are so many choices: stocks, funds, options, bonds and all kinds of alternatives. If you asked Peter Lynch, you would get a fairly simple answer. He would tell you to just jump in.
In his book, “One Up on Wall Street”, the philosophy is a little more complex than that, but not by much. Lynch believes that with a bit of research and solid discipline, an ordinary person can outperform the so-called investment experts.
The Author of “One Up on Wall Street”
Over 13 years, the assets Peter Lynch managed grew from USD 18 million in 1977 to USD 14 billion. Peter Lynch was one of the few fund managers who delivered consistently high returns to his investors throughout this period. After retiring, he wrote three well-known books: “Beating the Street”, “Learn to Earn” and “One Up on Wall Street”.
One Up on Wall Street is one of the best-selling books in the US, and it has lost none of its original value today. It is a book that top businesspeople consistently recommend.
How the Book Is Structured
The author divides the book into 3 main parts with 20 tasks to help readers research, study and analyze their own investing, so that they can ultimately get one up on Wall Street.
Highlights of the Book
If you find an attractive new company with impressive numbers, go ahead and invest. You may still profit from it. But Lynch seems uninterested in the companies everyone is talking about; the best companies are often right in front of you. They are the ones you come across every day and can easily understand. Lynch liked the tacos and other dishes from the fast-food chain Taco Bell, so he invested in Yum Brands (NYSE: YUM). The key idea here is “Invest in what you know”, and the market will take care of the rest.
Peter Lynch’s view on how to find stocks: “Any average investor can become an expert in their own field, and they can pick bargain stocks just as well as Wall Street professionals simply by doing a little investigating.”
Here are 13 questions an investor should ask to find an ideal company:
- Does it sound dull, or even worse?
- Is there anything special about its products?
- Does it do something disagreeable?
- Is it a spinoff?
- Do institutions own it / do professional analysts follow it?
- Are there nasty rumors around it, such as links to toxic waste or Mafia ownership?
- Is there something depressing about it?
- Is it in a no-growth industry?
- Does it have an economic moat?
- Do people have to keep buying it?
- Is it a user of technology?
- Are insiders, and management in particular, buying it?
- Is the company buying back its own shares?
If your answer to these questions is yes, you may have found a good business. While that may not be everything you need to make an investment decision, it can help you filter out a list of promising companies.
Peter Lynch’s Advice in “One Up on Wall Street”
Some great investing advice from Peter Lynch in “One Up on Wall Street”:
- Only invest what you can afford to lose without that loss affecting your daily life in the foreseeable future.
- The qualities a successful investor needs are few: patience, self-reliance, common sense, open-mindedness, a tolerance for pain, detachment, persistence, humility, flexibility, a willingness to do independent research, a willingness to admit mistakes, and the ability to ignore general panic.
- Invest in companies, not in the stock market.
- Ignore short-term fluctuations in stocks.
- Don’t try to predict the economy. Many individuals have failed at it. Forecasting the economy is futile.
- Big profits can be made in the stock market. Big losses can be made in the stock market too.
- If there is one stock to avoid, it is the hottest stock in the hottest industry. Ordinary stocks deliver the best results.
Our Thoughts on “One Up on Wall Street” – Peter Lynch
“One Up on Wall Street” has kept its original value to this day, thanks to the effort and research the author put into it. At first it may feel a little hard to follow, but the questions and reflections woven through it draw readers into the author’s flow of ideas and stories. As we explore its contents – company data and detailed information illustrated with charts – everything becomes clearer and easier to understand. The book does not just provide information; it is also a valuable reference for beginners and for today’s businesspeople.
“One Up on Wall Street” was written in 1989, so don’t expect to find any great stock picks in it. However, the former Fidelity fund manager gives readers an investing approach that can survive in this brutal market. It is one of the books newcomers should read. His arguments are simple and logical. Even if you disagree with his views, you can still take some simple but important lessons from the book. It may clearly change your investment strategy.
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