Beating The Street
Beating The Street: Book Review
Beating the street by Peter Lynch is a book about the fantastic journey of the great Peter Lynch, from becoming a technical analyst to the most celebrated mutual fund manager. Lynch picked up stock picking right out of the university and went on to make some stellar performance in the mutual fund history.
His stint in Fidelity Funds is nothing short of a rockstar performance, hard to emulate but not out of reach. If you are somewhat like me, who loves to pick your own stocks, I recommend you to read Beating the Street and draw inspiration from the life of Peter Lynch.
I would also request you to read his other two books, which are a great source of knowledge and will undoubtedly act towards improving your thinking approach for stock picking.
Some of the learning instances that Peter faced during his career get mentioned in Beating the street, and it certainly has a lot to teach if you understand the fundamentals of it. Like the period of Saddam’s sell-off, as mentioned in his book, a sudden drop in prices let Peter buy great companies at more reasonable prices, which is a critical lesson for the average investor to build wealth.
Some other incredible insights that I particularly find practical are the Peter Principles mentioned in between chapters which adds a bonus for reading this excellent book. I wanted to cite some of them here, but I thought it wouldn’t be fair to the book or Peter’s efforts.
His lessons are blended beautifully with the story, which will excite you to the core to pick up Beating The Street along with the other books. If you or the person in your knowledge is interested in making money in the stock market, do recommend them this book, and do not forget to share your thoughts with us on Instagram @informednation.in
Beating The Street: Book Summary in 3 sentences
- Behind Every stock there is a company. Find out what’s it doing.
- You have to know what you own, and why you own it.
- If you study 10 companies, you’ll find 1 for which the story is better than expected. If you study 50, you’ll find 5.
Who Should Read It?
People wanting to make money in stock market should read this book. This book is another step towards creating a well informed mindset on how to perform in certain crucial moments.
Top 3 Quotes
- Never invest in any idea which you can’t illustrate with a crayon.
- Gentlemen who prefer bonds over stocks do not know what they are missing.
- If you like a store, chances are you’ll love the stock.
I’ve compiled notes on some of the key topics in the book which can give you a better overview of the content you’re going to find in Beating The Street.
Beating The Street Notes
The Golden Rules 👑
- If you invest $1,000 in a stock, all you can lose is $1,000, but you stand to gain $10,000 or even $50,000 over time if you’re patient The average person can concentrate on a few good companies, while the fund manager is forced to diversify. By owning too many stocks, you lose this advantage of concentration. It only takes a handful of big winners to make a lifetime of investing worthwhile.
- In every industry and every region of the country, the observant amateur can find great growth companies long before the professionals have discovered them.
- A stock market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.
- Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and stock mutual funds altogether.
- Investing is fun, exciting, and dangerous if you don’t do any work.
- Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.
- Behind every stock is a company. Find out what it’s doing.
- You have to know what you own, and why you own it. “This baby is a cinch to go up!” doesn’t count.
- If you can’t find any companies that you think are attractive. Put your money in the bank until you discover some.
- Never invest in a company without understanding its finances The biggest loses in stocks come from companies with poor balance sheets Always look at the balance sheet to see if a company is solvent before you risk your money on it.
- Avoid hot stocks in hot industries. Great companies in cold, nongrowth industries are consistent big winners.