Who is Peter Lynch?
When it comes to books on investing I think the author is incredibly important. I like authors to have track record in the real world of investments. I would rather take advice from someone who has been there and done than in a very public and scrutinised way rather than those who say that they have earned significant returns using some strategy or another.
Peter Lynch has everything that I look for in an author even before I start reading his book. His investments were incredibly public (he headed up the Magellan fund at Fidelity Investments) and his returns were spectacular over a long period of time (he averaged a return in excess of 25% between 1977 and 1990).
This book is all about teaching you how to beat Wall StreetI know that there are a hundred books which all claim to do this same thing but Peter Lynch's approach is both practical and insightful while at the same time not being overly simplistic. Basically his formula for success for small investors is as follows:
- Know the weaknesses of Wall Street (or of large institutions generally)
- Don't try and beat them at their own game
- Use the information you personally have to give you an edge
- Don't forget the fundamentals of the stock you are investing in
- Know the type of company you are investing in (fast growing, turnaround etc.) and tailor your investment in that company to suit (i.e. know when you should both buy and sell these companies
Obviously the book is much more detailed than what I've outlined above but it is incredibly insightful. Although all the points above are important I really think that points 1 - 3 three are what set this book apart. Most investment books will