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This book is a sequel to Lynch's "Earn and Learn" Where he introduced the basics of the stock market and what the numbers all mean. Here he takes the theory a little further in search of what he calls a "ten bagger" a stock that will return your purchase price 10-fold.
Lynch describes how the average individual can spot things that could take Wall St months if not years to find. He uses a theory similiar to Warren Buffetts "circle of confidence"... only invest in stocks where you have an insight into the business. He uses the example of Dunkin Donuts as his example. He drank the coffee... like it, ate the donuts, liked them and saw more stores opening in the area. This set him out to find more information on the company until he finally invested. This is one of his theories on how the average investor can "beat the street". He states that this type of research is just as good if not better than listening to the analysts and investing in stocks which you have no idea about. He claims investing in stocks in which people know nothing about is something that Wall st. often does to make a quick profit as prices rise on a hot stock. Lynch warns against this due to it's dangers and stockbroker commission, stating it's not feasible for an individual investor.
Lynch admits that this type of investing can certainly be dangerous as it's a speculative investment as opposed to investing into companies with long term history of increasing dividends and increasing profits. Yet some aspects of his theory need more research as they can sometimes glorify the profits but not give a full and clear idea of the risks.
This book is good for giving ideas on how to go about looking for the "10 baggers" as lynch calls them and there certainly have been many people to make money from this type of investment, however, I would suggest that you read some other titles on the subject. Such as " The new buffettology" by Mary Buffett and the "intelligent investor" by Graham
5 of 5 people found this review helpful
Burned through it in a few hours. A simple decent investing book that covers the basic rules to follow.
However if you are seeking more technical detail & analysis on investing in equities then I'd avoid as you will probably of read much of the content elsewhere already!
Lynch gives some great insight into using your life's experineces as an "edge" into finding stocks, and then shows you how to research those stocks, and what to look for before choosing to invest. Finally he shows how to identify when to sell.
I've already listened to this book three times through. Each time I get somthing new from it. It is like drinking from a fire hose. I'm not sure if this is due to the abridgement, or if an unabridged version would take even more useful information and pack it even more densely into this book.
Peter Lynch does an excellent job of narrating his own book. An author narrating his own book can always be hit or miss... Lynch is a hit!
I wish he told about where to find free sources for the detailed stock research he suggests using. I'd hate to spend money on the paid services for my first few small investments, as it'd eat up any potential gains.
13 of 13 people found this review helpful
I enjoyed this book, althought I was expecting more advanced concepts (since I am in the investing business). Nevertheless, Peter Lynch does a great job at summarizing his investment perspective in an easy to understand manner. This book is aimed at amateur investors, and is a good place to start if you are interested in investing by yourself. But even for professionnals, I think everyone can learn from Peter Lynch. A must read for everyone interested in the stock market.
7 of 7 people found this review helpful