Books by Peter Lynch As a Guide for the Private Investor
How often have you taken a book in your hand only to experience true curiosity, a curiosity so strong that, without even reading all of the preface, you realized that the author really speaks to you, its reader, in a tet-a-tet manner, especially if such frank conversations encourage you and make you think, rethink and plan, when the author does not feed you superficial statements but rather and teaches you without superimposing his notions on you and offers solutions to problems, and also in a humorous manner tells you about serious matters such as investment and market analysis, and when the author is none other than Peter Lynch – the legend of the stock market and the best investment manager of all time?
Believe me, if you still have not gotten your hands on his book, of which by the way there are a few out there and about two of which we will be talking today, you urgently need to find these unique fountains of life and financial wisdom and hold on to them till you have read them all to the end.
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Peter Lynch is an investment manager, who, together with the «Magellan» Fund, managed by him, was able in 13 years to do for over a thousand US companies more than what the majority of professional traders are able to do just for themselves. 2700% is the figure by which the amount of money invested in the fund headed by him increased.
And despite the fact that the author is a man managing billions of dollars, he himself constantly attracts the reader’s attention to the fact that the books were written for a regular private investor. Peter Lynch has repeatedly said on the pages of his manuscripts that an ordinary private investor has the same chance to win in the market as a manager running a large fund, while in some cases the regular investor has even greater chances than the large-scale fund manager because of the lack of a huge number of external constraints.
Books we are talking about are precisely the , «Method of Peter Lynch: Strategy and Tactics of the Individual Investor” and “Beat the Wall Street»
They will undoubtedly be useful for those who have the need to understand fundamental analysis to the degree that you can tell your child about it, because that’s the way Lynch talks about one of the most complex market analyses. In his books, there are no complicated calculations or formulas, and the maximum you will encounter are examples of how the company’s balance sheet analysis is conducted. The books are filled with arguments about how business is constructed and operated business, how the quality of goods is determined, what management model are used at the company. The books reveal the features of management and explain a variety of ideas in a very simple and accessible form.
Lynch uses in his descriptions quite a well-known principle, whereby it is best to select the shares of those companies whose products have something special in them, but at the same time, it is best not to forget to understand how the business is organized and what the value of the company’s shares is.
Noteworthy, Lynch has not said a single word about technical analysis in the book, as he has always been a supporter of fundamental analysis. So, Lynch analyzes the price of a particular stock solely on the basis of how it is justified by business.
Further, the author is strongly opposed to speculative approaches and it can be said that he believes that tools such as futures, options and short sales are unfit for making good money.
If you decide to initially choose between the two books by Lynch, and we are confident it will concern only the sequence of their reading, please note the differences between them in the future:
Peter Lynch’s book «The Method of Peter Lynch: Strategy and Tactics of the Individual Investor»
Peter Lynch’s book «The Method of Peter Lynch: Strategy and Tactics of the Individual Investor» talks about the choice of securities theory and describes strategies. The book offers sa collection of systematized rules and principles, describes the choice of shares by private investors, the formation of a portfolio of securities, as well as the rules for choosing the time of entry into/exit from the market.
Peter Lynch’s book «Beat the Wall Street«
The book «Beat the Wall Street» answers the reader’s questions about investment activity tactics and is filled with real-world examples. So, the book reveals the reasons for the purchase of certain shares that have eventually conquered the market (or have not conquered it, in which case the author gives descriptions of failed investments).
The books talk about the subjects of entirely different nature, which have nothing in common. The books are read in one breath and filled with the author’s sparkling humor and the different expressions and sayings of the Wall Street.
The books will be helpful to both fund managers and private investors, as professional titles disclosing and touching on the issues such as active investing and deep fundamental analysis can be counted using the palm of one hand.
Following the long eulogy of the books, let mention a few downsides. The first and most important: the orientation of narratives to the US market and thus the use of the names of American companies and examples of their work everywhere.
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And one more thing: the books are to be read twice, as, in fact, many of the decisions about the choice of company shares are often intuitive. But! This is just the first impression. As a matter of fact, if you re-read the books, you will understand what a precise, detailed and time-consuming analysis precedes the decisions of various companies before they make investment decisions and what a great number of factors influence and affect the way the investor decides whether his/her decision is correct without a second’s doubt.
Торговец, действующий по собственной инициативе и стремящийся извлечь прибыль непосредственно из процесса торговли. Обычно подразумевается торговля ценными бумагами (акциями, облигациями, фьючерсами, опционами) на фондовой бирже. Трейдерами также называют торговцев на валютном (форекс) и товарном рынках (например, «зернотрейдер»). Торговля осуществляется трейдером как на биржевом, так и на внебиржевом рынках.