Enterprising Investor Forum

Beating the Street, Peter Lynch Tuesday, March 25, 2008

After our review of One Up on Wall Street (link) we had to do Peter Lynch’s follow-up. This book is similar in terms of strategy and what he preaches but it offers a more in-depth look on how to picks investment products and screen the market place (whilst taking the reader through his full experience at Magellan).

As usual, the book is a very easy read and quite amusing. What is refreshing is that the reader really gets a feel about the psychology of money management and not only the technical/strategic side of the business. As he says, “In dieting and in stocks, it is the gut and not the head that determines the results”. N.B. remember: you are getting this advice from one of the most successful track records of any money manager.

A quick overview:

• You can’t see the future through a rear view mirror
• If you are going to pick a fund or stock, you might as well take the time to pick a good one
• As Buffett also notes, the extravagance of any corporate office is directly proportional to management’s reluctance to reward the shareholders
• Not all common stocks are equally common
• The best stock to buy may be the one you already own

If you want good results, you have to invest only in companies you have researched and do not be afraid to take big positions if you have done your homework.

Enjoy!