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Learn the key ideas of the book by Peter Lynch , John Rothchild

One Up on Wall Street

Get to know the market to ensure investment success

In One Up on Wall Street , a bestseller with over a million copies sold, legendary mutual fund manager, Peter Lynch, explains the advantages that private investors have over the professionals. The real game changer comes with investing in what you know: since investment opportunities are everywhere, private investors can identify companies to invest in before professional analysts find out about them, and turn an average equity portfolio into a highly successful one. Lynch also offers advice for identifying which stocks to invest in, and which ones to stay away from, as well as how to thoroughly analyse a company and its growth prospects before investing in its shares.

One Up on Wall Street
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Individual investors have an edge over Wall Street traders, but they need to ask themselves three questions before they invest

Investing successfully is not exclusively reserved for professional and institutional investors - private investors have advantages over Wall Street traders in terms of flexibility, as they are not constrained by the bureaucracy of large institutions, legal and social barriers, or short-term performance concerns. 

However, it is important that a private investor asks themself three questions before buying shares in a company:

  • Do I own a house? Before investing in stocks, you should consider buying a home, which, for most people, is a better investment. Houses are kept for many years, and are a good hedge against inflation. Also, having a roof over your head and somewhere to live for a long time is always a good place to start.
  • Do I need money? The money you want to invest in stocks should be extra - for example, if you have to pay for your child's college education over the next two or three years, don't invest that money in stocks.
  • Do I have the personal qualities required to become an investor? Investing successfully is potentially within everyone's reach, but there are fundamental, individual traits that you must possess: patience and perseverance, as well as the ability to keep a cool head and remain detached, to use common sense, but to also stay open-minded and be ready and willing to do your research. On the other hand, you also need to be ready to make decisions even when you don’t have all of the information on hand. Finally, you need humility, flexibility, and a willingness to learn from your mistakes.

The key ideas of "One Up on Wall Street "

Individual investors have an edge over Wall Street traders, but they need to ask themselves three questions before they invest
Only invest in the things you know well, and look for companies that are unattractive or undervalued by analysts. Avoid hot stocks in the hottest sectors
Study the history and growth potential of a company thoroughly, before purchasing shares
The six categories of company growth: slow growers, stalwarts, fast growers, cyclicals, turnarounds, and asset plays
Take-home message

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