Peter Lynch Books
Instead of turning to Carl from your local gym for investing advice, you’ll probably be more successful getting advice from an expert.
Who better to turn to than Peter Lynch?
Lynch is widely regarded as one of the best investors in the world.
Back in 1977, Lynch was given his big break when he was given the Magellan Fund to manage. Over the next 13 years, he grew the fund from $20 million to over $14 billion. Investors were drawn in by Lynch’s legendary 29% annual returns. He’s since retired but has passed on his investing knowledge through his books. Peter Lynch’s books offer nuggets of wisdom and a solid investing framework that anyone can use.
Lynch starts off his first book by setting a scene: a 7th grade classroom. Each 7th grader is given the task of researching a company, investing in it, and then explaining their investment choice to the class. Amazingly, the seventh graders beat the S&P 500 by an astonishing 43.5%. He uses this example to show than anybody can be a good investor and as you put in the work.
Lynch has always advocated in investing in what you know. In fact, he says you should only invest in a company if you can draw out why you are investing in it to a 5th grader. If you are able to do this, it means you understand the company and have a solid idea of the business model. Using this method, Lynch believes that amateur investors can actually outperform Wall Street. Another one of his self crested ‘Peter’s Principle’ is to stay calm during times of turbulence in the stock market. He encourages investors to keep in mind they are investing for the long term. It may take time but the markets will always recover and all will be well again with the world. You can now sleep well when the market crashes, knowing that your wealth loss is only temporary.
In this book, Peter Lynch gives reader a sneak peak into his investment strategy. He never went after companies that were popular, instead he scoured the markets till he found a company that was undervalued and had growth potential. In, Beating The Streets, Lynch suggests researching companies whose products you really love. As an individual investor you are at an advantage, because Wall Street is much slower than you in catching trends. Does a particular regional fast food chain seem to be doing well in your area? Keep your eye on it, because odds are it will probably do well nationwide to. Lastly, Lynch’s advises investors to always check up on their portfolio. He does this constantly in order to evaluate whether or notan investments still deserve to be there.
BEST STOCK NEWSLETTER OF 2020 (October 11, 2020 UPDATE)
TWO (2) of this year's Motley Fool Stock Picks Have Already QUADRUPLED, ONE has TRIPLED, and 2 more have DOUBLED in just 9 Months!
We have been tracking ALL of the Motley Fool stock picks since January 2016. That's almost 5 years and 114 stock picks. As of Friday, October 9, 2020, TWO of their 2020 stock recommendations have already quadrupled (ZM and TSLA), another one has tripled and 2 more have doubled (SHOP and NVTA all in just the first 9 months of 2020.
In addition, 7 of their 2019, 9 of their 2018, 9 of their 2017 and 12 of their 2016 picks have also doubled. Best of all, over the last 5 years the average stock pick is up 144%. That beats the SP500 by an average of 106%. And that's even accounting for all of this COVID mess that has wreaked havoc on most stocks. BUT, the Fool has done so well because they have quickly identified stocks this year that will perform well in the post-COVID world. THAT is how the Fool consistently does so well--they adapt and constantly pick stocks before everyone else realizes the opportunities.
- Zoom Video (ZM) – April 16, 2020 pick and it is already up 230%
- Shopify (SHOP) – April 2, 2020 pick and it is already up 177%
- Zoom Video (ZM) – March 19, 2020 pick re-recommended and it is already up 301%
- DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 33%
- NVTA picked February 6, 2020 is up 102%
- Tesla (TSLA) picked January 2, 2020 before the crash and it is up 373%
- HubSpot (HUBS) picked December 5, 2019 and it is up 92%
- Netflix (NFLX) picked November 21, 2019 and it is up 55%
- Trade Desk (TTD) picked November 11, 2019 and up 146%
- Zoom Video originally picked Oct 3 and it is up 546%
- SolarEdge (SEDG) picked September 19, 2019 and it is up 125%
Now, no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super profitable. They also claim that since inception, their average pick is up 529% and now we believe them. Many analysts are saying that we have passed the bottom of this COVID crisis and "certain" stocks will recover quickly and be the new leaders. So make sure you have the right stocks in your portfolio.
Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link.
FYI -- As of October 25, 2020 the Motley Fool's Oct 1st pick PINS is already up 19%, their Sept 3 pick FVRR is already up 36%, their July 2 2020 pick is already up 26%; their June 4th pick is up 41%, May 7th pick NOW is up 34%, their April 16th pick ZM is up 240%, their April 2nd pick SHOP is up 196%, their March 19th pick is up 313%, their February 6 pick is up 104% and their January 2 pick is up 388%.
Don't miss out on the Motley Fool's next stock pick--especially while they are super hot picking the stocks that will excel in this COVID market. Here is the schedule for their next TRADE ALERTS:
- November 5, 2020 - Tom's New Single Stock Recommendation
- November 12, 2020 - Tom's 5 New Best Stocks to Buy Now List
- November 19, 2020 - David's New Single Stock Recommendation
- November 25, 2020 - David's New 5 Best Stocks to Buys Now List
“Those who fail to learn history are doomed to repeat it”.
In the ‘Learn To Earn’, Lynch dedicates a lengthy 90 pages to the history of capitalism. Although it seems superfluous, it serves a noteworthy purpose. The history lesson will allow investors to understand the mistakes many have made before them. For example: the herd mentality, investing in things you don’t understand, getting in too severe debt. Understanding these basic personal finance skills are absolutely necessary if you want to be a successful investor.
In the book, Lynch forces you to take a long hard look at where you cash is going. If it’s not flowing to the right places you need to turn off the tap (cash flow) and redirect that capital into your investment portfolio. Bottom line,if you spend less than you earn, you can invest the remaining amount in stocks and grow your money.
In terms of allocating that money, Lynch strongly suggests that investing in what you know is the right way to go. He then advises readers on what to look for when researching a company. Lynch says that investors should pay special attention to the management of a company. He believes that the competence of a leader will be reflected in the stock price. Lynch wraps up this book by giving a brief summary of the points discussed in the book.
Peter Lynch’s last and most famous book is titles ‘One up on Wall Street.’ He starts by stating that nobody, not even the Wall Street jockeys, were born great investors. Research is what will eventually transform a novice to a seasoned stock picker.
Something that you may not expect in an investing book, he makes the reader question whether or not investing is right for them. You can’t start investing if you don’t have the capital to get started. According to Lynch, a person shouldn’t hold off on buying a house in order to get rich quick – it’s not going to happen. Here at WSS we couldn’t’ agree more with….Only start investing your money if you have the means of doing so!
If an investor does feel he is ready, Lynch offers them some sound investment advice. Like in his previous books, Lynch reaffirms that investors should stick to what they know and avoid investing in ‘hot’ sectors. It’s an easy way to lose all of your money. Instead, he invites investors to look at stock like a little piece of the company. Where is the company going? What are their earnings prospects? These are all questions Lynch asks when he himself is analyzing a company. Once you complete all this research, if you can’t explain why you want to invest in a company in 2 minutes, don’t invest in it at all.
In ‘One Up on Wall Street,’ Lynch discuss the distractions an investor can face when trying to build their portfolio. Options and futures both serve legitimate purposes, but investors get carried away and see them as get rich quick products. Those are not what they are. It is imperative for the investor to remain focused on investing in undervalued companies that have room to expand their business.
In a suiting end, he reminds you to have conviction. The entire market can say one thing, but if you’re thorough research is saying something else, don’t succumb to their pressure. Invest in what the research tells you and you will be served well.
We hope these books have given you the inspiration to start your investing journey. If you’re interested in learning more about investing from another famous person, check out our top 10 quotes from Gordon Gekko.