How to Beat the Markets with Peter Lynch’s ‘One Up on Wall Street.’

The topic of stock/investment in the larger finance-related genre is filled with cliches or overly technical books. Any new entrant in this genre may soon feel puzzled by the amount of information in the market and the not-so-good prevalent advice. Therefore, in this context, it is to the credit of Peter Lynch, who has presented the matter in simplistic terms for anyone to follow.

Peter Lynch has a legendary status in the investing world. His shot to fame was his time as manager of the Magellan fund at Fidelity Investments, where during his time, the fund averaged a 29.2% annual return from 1977 to 90, increasing from dollar 18 million to dollar 14 billion(more than the GDP of many countries).

Peter, true to the description of the cover page, goes on to explain to the general reader/amateur investor how one can “Stop listening to professionals” and “pick tomorrow’s big winners by paying attention to new developments at the workplace, the mall, the auto showrooms, the restaurants, or anywhere a promising new enterprise makes its debut.” The crux of his advice remains that just by keeping one’s senses functional and paying attention to the events and developments that happen in one’s surroundings, one has a reasonable chance of success.

Throughout the book, Peter promotes his investment style centered around the value investment philosophy following the footsteps of Stalwarts like Benjamin Graham and Warren Buffett. He firmly believed that-“value always wins out—or at least in enough cases that it’s worthwhile to believe it.”

As the book progresses, he constantly advises the amateur investor to use his common sense to zero in on companies to make worthwhile studying, then following it up with thorough research because –“Finding the promising company is only the first step. The next step is doing the research.” Over time, the investor’s personal preparation, knowledge, and research increase, and so do his chances of success. Seated deep in the value investment philosophy, he advises investors not to treat stocks as “lottery tickets” but as part of the company to own and to,-“Stand by your stocks as long as the fundamental story of the company hasn’t changed.”

Peter Lynch doesn’t hide his disregard for intraday trading, futures, and options and advises the reader/investor to stay away from search instruments by giving the popular 9 out of 10 investors fail in the F&O trade(which pops in all modern discount brokerage applications even today) and further supporting his argument by saying that,-“Warren Buffett thinks that stock futures and options ought to be outlawed, and I agree with him.”

Overall, it’s a beautiful, easy, and solid read, even for a novice. His style of writing is excellent, interlaced with practical real-life examples. Some readers find its application outdated today because Peter Lynch operated in a completely different era. But most of the principles are solid and practical in many real-life scenarios, even today. The book is not to be treated as an end but the beginning, which lights the path forward for an average investor as one sets out on this interesting path. As an investor, as one grows in experience and knowledge, one should keep in mind that –“Investing in stocks is an art, not a science.”