One Up on Wall Street by Peter Lynch

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Stocks Aren't Lottery Tickets.

There's a company attached to every share.

Companies do better or they do worse.

==> If a company does worse than before, its stock will fall.

====> If a company does better, its stock will rise.

If you own good companies that continue to increase their earnings, you'll do well.

Corporate profits are up 55-fold since World War II, and the stock market is up 6-fold.

4 wars, 9 recessions, 8 presidents and 1 impeachment didn't change that.

Quote Peter Lynch in One Up on Wall Street.

some books are easier read than others. I would suggest "One Up on Wall Street" and "Beating the Street" by Peter Lynch.

http://www.masteryourfinance.com/forum/ ... reet#p1399

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You don't need to make money on Every Stock you Pick.

In my experience, 6 out of 10 Winners in a portfolio can produce a Satisfying Result.

Why is this?

Your losses are Limited to the amount you invest in each stock (it can't go lower than zero), while your gains have No Absolute Limit.

Invest $1,000 in a clunker and in the worst case, maybe you lose $1,000.

Invest $1,000 in a high achiever, and you could make $10,000, $15,000, $20,000, and beyond over several years.

All you need for a lifetime of successful investing is a FEW BIG WINNERS, and the pluses from those will overwhelm minuses from that stocks that don't work out.

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"Long-term investing has gotten so popular, it's easier to admit you're a crack addict than to Admit you're a short-term investor.

People are advised to think long-term but the constant comment on every gyration (financial weather on highs, lows, troughs, turbulence, and endless speculation about what's next and how to handle it) puts people on edge and keeps them focused on the short term. It's a challenge not to act on it."

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It pays to exercise independent thinking.

"If you're a surfer, a trucker, a high school dropout, or an eccentric retiree, then you've Got an Edge already.

That's where 10-baggers come from, beyond the boundaries of accepted Wall Street cogitation"

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Wall Street Does Not Look Kindly on Fast Growers** that run out of stamina and turn into slow growers, and when that happens, the stocks are beaten down accordingly.

But as long as they can keep it up, Fast Growers are the BIG WINNERS in the stock market. I look for the ones that have good balance sheets and are making Substantial Profits.

====> The Trick is figuring out when they'll Stop Growing, and How Much to pay for the growth.


** Fast-growers are Small, Aggressive New enterprises that Grow 20 to 25% a year.

A fast-growing company doesn't necessarily have to belong to a fast-growing industry. All it needs is the room to expand within a slow-growing industry.

Eg. Taco Bell in the fast-food business; Wal-Mart in the general store business; The Gap in the retail clothing business; Marriott in hotel business; Anheuser-Busch in beer industry.