While a lot of investment books will tips that claim will triple your money (but only make you broke instead) Lynch preaches from the pulpit of common sense when it comes to making investments.
One up on Wall Street should be required reading for every investor who wants to succeed if you have never invested a nickel or hold stock in 1,000 companies, Lynch's life time of investing experience can help you make better investment decisions.
This book helps you categorize and what phrase different stocks (and the companies behind them) are in and then what strategy you can use when investing in these different stock categories.
It will help you sort through the maze of financial numbers and makes it easy for anybody to perform simple stock research that professional perform everyday and are often overpaid for.
Lynch's lessons are timeless and his common sense approach can work in any market, up or down. If you have never invested before and looking for some help or you have spent years investing, buy two copies of these books in case you lose the first one.
Within the 300 pages of this book, Lynch outlines a useful rubric against which all stock selections might be measured. His stocks fall into six categories: Slow Growers, Stalwarts, Cyclicals, Fast Growers, Turnarounds and Asset Plays. Screening, buying and selling advice are outlined for each of these six flavors, although nothing revolutionary (eg., Sell a slow grower when the dividend is unattractive.) He delivers a wealth of the basic analytical tools (well, more like rules of thumb) for stock research, explaining price earnings ratios, the import of tax loss carry-forwards, goodwill accounting, inventories, and other basics of P&L statements and Balance Sheets. It's a pocket guide financial course for those who may have slept through Accounting 101.
Lynch urges stock pickers to do their homework, and suggests the regimen of a "Two Minute" drill, whereby an investor can recite a brief monologue of reasons for selecting a security: Reasons for selection, what the company needs to do to succeed, and pitfalls that stand in the way. Obviously, this is not a book for the technicians or chartists. Nor even speculators, as Lynch reminds the reader that his "ten-baggers" or "forty-baggers" all come as a result of having held at least three to four years.
Quite a bit of the book carries a populist bent. There is plenty of advice to pay more heed to what's happening in the local shopping mall than to investment brokers ("oxymorons"), and to avoid stocks with exotic names or that may have been whispered to be hot. Of course, we've all been aware of this, and we're all wealthy and drinking daiquiris on the beach now, right?
In sum, it is worth the investment of the few hours it takes to swallow this information. At worst, it is an entertaining look at some high-fliers the former Magellan manager scored with, but at the very least it serves as reminder that basics need to be followed, and nothing works as well as solid research, good discipline and old fashioned hard work.
Also, the witty writing will give you a laught even if you are not interested in investment.