One Up On Wall Street: How To Use What You Already Know To Make Money In The Market
More than one million copies have been sold of this seminal book on investing in which legendary mutual-fund manager Peter Lynch explains the advantages that average investors have over professionals and how they can use these advantages to achieve financial success.
America’s most successful money manager tells how average investors can beat the pros by using what they know. According to Lynch, investment opportunities are everywhere. From the supermarket to the workplace, we encounter products and services all day long. By paying attention to the best ones, we can find companies in which to invest before the professional analysts discover them. When investors get in early, they can find the “ten baggers,” the stocks that appreciate tenfold from the initial investment. A few ten baggers will turn an average stock portfolio into a star performer.
Lynch offers easy-to-follow advice for sorting out the long shots from the no shots by reviewing a company’s financial statements and knowing which numbers really count. He offers guidelines for investing in cyclical, turnaround, and fast-growing companies.
As long as you invest for the long term, Lynch says, your portfolio can reward you. This timeless advice has made One Up on Wall Street a #1 bestseller and a classic book of investment know-how.
THE NATIONAL BESTSELLING BOOK THAT EVERY INVESTOR SHOULD OWN
Peter Lynch is America’s number-one money manager. His mantra: Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.
Now, in a new introduction written specifically for this edition of One Up on Wall Street, Lynch gives his take on the incredible rise of Internet stocks, as well as a list of twenty winning companies of high-tech ’90s. That many of these winners are low-tech supports his thesis that amateur investors can continue to reap exceptional rewards from mundane, easy-to-understand companies they encounter in their daily lives.
Investment opportunities abound for the layperson, Lynch says. By simply observing business developments and taking notice of your immediate world — from the mall to the workplace — you can discover potentially successful companies before professional analysts do. This jump on the experts is what produces “ten baggers”, the stocks that appreciate tenfold or more and turn an average stock portfolio into a star performer.
The former star manager of Fidelity’s multibillion-dollar Magellan Fund, Lynch reveals how he achieved his spectacular record. Writing with John Rothchild, Lynch offers easy-to-follow directions for sorting out the long shots from the no shots by reviewing a company’s financial statements and by identifying which numbers really count. He explains how to stalk ten baggers and lays out the guidelines for investing in cyclical, turnaround, and fast-growing companies.
Lynch promises that if you ignore the ups and downs of the market and the endless speculation about interest rates, in the long term (anywhere from five to fifteen years) your portfolio will reward you. This advice has proved to be timeless and has made One Up on Wall Street a number-one bestseller. And now this classic is as valuable in the new millennium as ever.
About the author:
Peter Lynch managed the Fidelity Magellan Fund from 1977 to 1990 when it was one of the most successful mutual funds of all time. He then became a vice chairman at Fidelity and more recently has become a prominent philanthropist particularly active in the Boston area. His books include One Up on Wall Street, Beating the Street, and Learn to Earn (all written with John Rothchild).
John Rothchild was formerly a financial columnist for Time and Fortune magazines.
Peter Lynch is vice chairman of Fidelity Management & Research Company — the investment advisor arm of Fidelity Investments — and a member of the Board of Trustees of the Fidelity funds. Mr. Lynch was portfolio manager of Fidelity Magellan Fund, which was the best performing fund in the world under his leadership from May 1977 to May 1990. He is the co-author of the bestselling Beating the Street and Learns to Earn, a beginner’s guide to the basics of investing and business. He lives in the Boston area.
Reviews about the ebook:
- El Artesano:
So, here we have an artisan unveiling the secrets about his craft. I really could not provide enough praise to this piece. I guess all I can say is that this book made it to my car. and stayed! Many books have taken a couple of rides with me in my car just to return to the shelf. I just happen to have two little kids (4 and 2) so I have spent a lot of time in my car during the last 4 years (you know, to get them to nap). So, as they nap, I read. And the read better be good because I don’t have a lot of time for it.
Now, back to the book. This book is known for emphasizing some of the advantages that individual investors have (say, over institutional ones) when it comes to finding investment opportunities. One of these advantages relates to the fact that -due to mandate or sheer size- institutional managers cannot even start considering investing in small caps. This leads to a second advantage, which is that individual investors can find very attractive opportunities by just looking around them. This advantage is even more true today considering the easy access everybody has to stock and company-related data.
This is one of those books where, If you randomly pick a paragraph on any page, it will find a way to keep you engaged. The writing style is just too good. And I think it is that good because this man is pure wisdom. He could sit in front of me for the rest of my life and that probably would not be enough time for him to pass on all his knowledge. He was an investor, a trader, an equity analyst, a portfolio manager, and a businessman all in one. Incredible!
The three sections I found most valuable are these:
1- company/stock classification (slow/fast growers, stalwarts, turnarounds, etc)
2- description of the characteristics of a fast grower or 10-bagger.
3- details of the effect of interest rates on the markets’ historical P/E ratio.
Do yourself a favor a read this book. You won’t regret it.
well, hello! do you like my suit? I like yours! where’d you get it?! well, today I am dressed up like a businessman because we are going to be reviewing a real businessman’s book! yep, you guessed it, you wily little bitch, that businessman is the great peter lynch, not to be confused with the act of lynching which was a form of extreme racism that took place throughout the south during the early years of the civil rights movement! lol! ok, let’s go!
many people think that it’s impossible for an average individual to compete on wall street against huge and infinitely resourced companies.
lynch rejects this assumption, and posits the opposite: the average person actually has an advantage, since it is she who is in constant contact with the everyday representation of a stock’s products.
examples: lynch took a large long position in the Gap after his wife and all her girlfriends fell in love with it. made a fortune. also took a large long position in Hanes, the company behind L’eggs, again on his wife’s advance, made money.
examples abound in this book: la Quinta motor inns, taco bell, Philip morris, etc. all companies that would have led to a 10, sometimes 20 fold return on your initial investment.
his advice: invest fundamentally, due diligence, invest in what you know, don’t invest in what’s hot, don’t believe the professionals, get over your emotions, invest for the long-term.
I heard about this book from various places and it seems to be highly recommended for anyone interested in investing. Lynch is well known for his “invest in what you know” mantra, and even though some take it as justification to invest in whatever company they simply “feel good about,” Lynch is nowhere near as reckless in his book and even warns against it.
His main premise is that individuals, such as me and you, take part in the economy and are well aware of new trends and investing opportunities. By being aware and doing diligent homework before investing, you can find numerous “baggers” – stocks that increase by multiples over time – that can make you quite wealthy. In fact, Lynch points out this gives the average person an edge against professional investors, thus giving the book its title. Throughout the book, he details his ideas and methods for analyzing companies and serves as a good foundation for value-oriented investors. The author also seems to have a good sense of humor (like Buffett) which makes the book joyful to read.
The only downside of the book which I can find is that it is a bit outdated as it was written decades ago. Much has happened since then such as the dot-com bubble and the 2008 recession. But I find this a minor issue as the lessons and techniques detailed in the book are general enough to apply broadly. It is no way takes anything away from the quality of the book.
A very helpful book for those who want to gain some basic knowledge about how stocks work in the financial market and how to select the best portfolio of securities. Lynch shared his experiences and told us how he felt or how he dealt with losses and success when investing. I personally liked this book and he made these seemingly difficult concepts so much easier!
- W. L.:
I originally read this when I was just getting started in a finance career in the early 1990s. I credit this book as one of the key reasons I became excited about the stock market. After 27 years as a stock analyst, I decided to read it again.
I still think it’s a great book, but he is giving the average individual investor too much credit on being able to interpret what the financial statements are really saying and how to think about the valuation of the stock. I really like his take on being aware of what you are seeing and hearing around you (not on TV or the web) as you walk through the mall to see the hot stores with the crowds, listen to your kids on hot products, or fashions, etc. But once you get these ideas and then analyze the financial statements and valuation, most will want to also bounce the idea off a professional (financial adviser) or at least use a quantitative service like zacks.
- George Jankovic:
Regular re-read (every 5-10 years) one of my two favorite investment books. (The other one is by the same author.).
Peter Lynch was the greatest mutual fund investor of all time growing his Magellan fund to over $1 billion. His investment style is a combination of growth and value investing, so-called GARP–growth at a reasonable price.
While he made most of the money in big-cap stocks like Wal-Mart or turnarounds like Volvo, Ford, and Chrysler, he loved investing in small caps. This book covers it all. It’s the most practical book on investing and the smartest. (His initial advice, by the way, is: before investing in stocks, buy a house. Why? You’ll see.)
Whether you like growth or value, small or big caps, this book will be useful.
Awesome book if you’re getting started investing or a seasoned veteran. This is a much easier read than the intelligent investor. I had a fun time reading this book, Peter does not get too technical explaining anything and really gives you insight into how he invested when he ran The Magellan fund at Fidelity. You will learn about P/e ratios and other basic fundamentals to look for in companies without getting into dry details. Pretty easy read, under 4 hours for your average reader.
- Science Of Success:
One of the most interesting books about long-term investing I’ve found so far.
My favorite quote is “when someone says that ‘A’ is the new ‘B’, it usually means that ‘A’ and ‘B’ are going down”.
This is a very good book, and if you have not read any of Peter Lynch’s previous books, this is a good one to start with.
That said, much of this book is repeated in his other books.
It is a fun, interesting, and potentially useful book if you are interested in high-level investing. This book has less useful advice for the small investor than some of these other books.
Mr. Lynch’s writing style is engaging and interesting.
All in all, a good book.
- Andrew Ye:
I originally picked this book because after I read a lot about Warren Buffett’s investing I decided to see other people’s style. This was a good read but it was specific to Lynch’s style so it was not applicable to today’s investment decisions. Peter describes how he came about developing his strategy for success. He talks about his past, his victories, and some of his failures. He describes everything that happened in an easy way to read. Anyone, including non-financial folks, can understand this.
The book emphasizes through numerous examples the importance of understanding the companies you invest in, picking winners, and collecting the important facts. Although some of the companies mentioned are no longer in existence, the reasoning and the thought process is as valuable as it was when the book was written. I particularly liked the list of questions to ask before buying a stock and for identifying suitable times to buy or sell a stock. “Not all common stocks are common”(Lynch 36).
In the end, this was a good read but many of the topics are outdated. This book is significant to people starting on investment because it teaches you that the average investor can get rich.
This was my sequel from Benjamin Graham’s (Warren Buffets mentor) technical book ‘Intelligent Investor’. It did not disappoint. Peter Lynch’s unique perspective as a former mutual fund manager gives insight into how mutual funds picked stocks and how he picked stocks. How he picks stocks versus Buffett is quite similar for the most part but he puts his own unique twist to it which most people wouldn’t think of. He gives plenty of examples of mistakes he made and how he has learned from them which makes him seem very relatable. I would recommend this book to anyone with basic knowledge of corporate finance ( what stocks are, how they work, etc). However, this book, like Benjamin Graham, only gets 4 stars simply because it’s old and some principles & advice may not apply anymore.
This is a short book, but long on advice even, and especially, after the financial meltdown. It took me about 40 – 45 minutes to go through the book, but I’ll read it again tomorrow and maybe again next week allowing the content to set in.
The book is a fun read and gives novices, such as myself, some basic fundamentals and concepts before we rush in (again) to lose our money (again) while the big boys rake all the profits (again) in the casino we all know as the stock market. There is no specific advice in this book other than to spend as much time researching a stock as you would buying a new refrigerator; however, I found the general concepts interesting and informative.
But reader beware, even though the book is short Lynch does get the point across that choosing your own stocks is and making money is a combination of perspiration and luck. I’ve made the mistake of rushing in to buy a certain stock that was “hot”, sometimes it worked out but mostly I lost money.
- Dr. W. H. Konarzewski:
There is something endearing about Peter Lynch’s approach. He takes the view that the average retail (amateur) investor can beat the professionals by using common sense and exercising self-control. Whilst investment is always a gamble, the shrewd investor can find companies that swing the odds in favor of a win. Peter Lynch liked companies with a good product that he could understand – he bought into Taco Bell because he liked their coffee and because he saw it was a strong company with sound management and plenty of room to grow. As a part of his research, he would visit company offices. If he found shabby offices with frayed carpets and cracked linoleum in a downbeat part of town, he would reason that these companies put all their money into the business and not into glitzy office blocks. And he would invest. But he shied away from companies that spent their profits unwisely on unnecessary status symbols and acquisitions. All in all his advice is practical. Be your own person. Don’t follow the herd. Don’t worry about the macroeconomic situation. Don’t focus on short-term movements in share price. Don’t pay too much attention to complicated things like charts. Be patient. Be slow to buy and slow to sell. And above all know the company in which you’re investing.
- Robert Martin:
I’m currently working my way through the equity investing classics. One Up On Wall Street is among the best I’ve read. I decided to pick it up after watching a few talks by Peter Lynch and have not been disappointed – it is both informative and hilarious.
The central theme is that if you want to be successful in stocks, you have to find your edge. This is a point that many other classics skip over, instead of jumping straight into the analytical techniques. Lynch continually emphasizes the importance of thinking for yourself, preferring stocks that have very little analyst coverage from Wall Street or economists:
As some perceptive person once said, if all the economists of the world were laid end to end, it wouldn’t be a bad thing.
It’s a very refreshing framework for thinking about stocks, and the book is packed with tips and things to look for when you’re examining a company.
When somebody says, “Any idiot could run this joint,” that’s a plus as far as I’m concerned because sooner or later any idiot probably is going to be running it.
In summary, there’s a huge amount to be learned from Peter Lynch and his writing style makes this a very painless process.
- Dave E:
Lots of people will recommend Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel as the best investing book out there (Warren Buffet included) but in my opinion this trumps it. Peter Lynch’s down-to-earth approach to investing is very clearly explained and keeps it all very interesting which is no mean feat – investing is a very dry subject.
I particularly like the sections where he details some of his investments (good and bad) and includes the charts explaining where he bought and sold and the reasoning behind that. Peter actually goes quite in-depth on some of his biggest mistakes which is a really nice touch and takes it away from being overly preachy like a lot of other investment books.
So far I’ve read it twice and I fully intend to read it again.
- Ardon Pillay:
Really great book on equity investing.
Lynch takes a great deal of time persuading the reader that the average man on the street has an advantage over the Wall Street analysts tucked away in their ivory towers.
He suggests playing to one’s strengths, using whatever specialist knowledge we have gathered to work out if a company is likely to see changes in earnings. Even our experiences as consumers can be quite telling and may offer clues about the direction in which a company might be going.
It’s a really refreshing take on investing in equities, there’s not a huge amount on formulae and statistical methods. The main focus is really on helping you set up the right mindset with which to invest.
Given when the book was written a lot of what is described in the book is very outdated, naturally. The basic message he conveys though is as true today as ever. Probably truer now than ever with the number of day traders using apps like Robinhood to blindly gamble on stocks, resulting in them being pushed up well above their real value. Certainly, if everyone adhered to the logic in this book during the late 90s early 00s the Dot.com bubble wouldn’t have happened.
It’s an entertaining read which I think provides a lot of fundamentals for being a long-term investor, and how to keep your head about you during bad and good times.
I will say that the author is a self-proclaimed technophobe (despite having a large holding in Apple when he wrote the book), and mentions that he’s inclined to steer clear of tech companies. As clever as this was before the dot.com crash it isn’t great advice in 2020.
- Jay Sadhwani:
For the folks gearing up to the world of the stock market, this book is a must-read.
It sets up your mind regarding how to choose companies that have the potential to become great.
It gives a good introduction to reading the balance sheets and you don’t need any prior knowledge for understanding the views. But more than balance sheets it suggests us to pay attention to the world around us to find the right stocks
- Credit Man:
This book is more of a story about how Peter Lynch operated than a technical guide to stock selection. It outlines his approach: look for companies about which you know something; do not buy too “expensive” on a P/E or Book Value basis (both restrictions could be disputed, but it is Mr. Lynch’s style).
In one place he is dismissive of technical analysis, so do not expect that.
Given that this was written 20 years ago, it is remarkable that so many good principles, and bad practices, can be seen widely today.
Worth reading, even if you do not follow the Lynch approach.
- Nuno Oliveira:
Peter Lynch is an absolute genius! It was a pleasure to read this book.
- Reading Harbor:
This is one of my favorite financial advice books ever.
Peter Lynch was a genius of his time. His detractors can argue the reasons WHY he was successful (luck, timing, etc.) but it is hard to argue with the fact that he was immensely successful.
In this now-famous book, Peter describes how he came about developing his strategy for success. He talks about his past, his victories, and some of his failures. He describes everything that happened in an easy-to-read, colloquial sort of way. Anyone, including non-financially literate folks, can understand this.
My background is not in financial services. Unlike some other books, which I found difficult to follow (ex. The Intelligent Investor), this book talks about finance in a simple but erudite fashion. That way you are not bogged down by the complex verbiage. You can get the concept faster.
I am still applying the tips I found here.
* Very well written and easy for any layperson to understand
* Reads like a story, goes over some of Peter’s personal successes
* Gives specific examples based on Peter’s life experience
* Describes also his failures, so it gives a balanced view
* Uses common sense and explains things in ways that are logical. (For example, He points out many investors try to time the market, instead of focusing on researching companies or using the knowledge that they have which gives them a personal edge.)
* Timeless. There is a reason this book is consistently rated 4+ on Good Reads, Amazon, and other book reviewing sites. It’s one for the masses.
* Some of the tips do require you to actually have some financial networks or resources to apply. (Nonetheless, I think this is a small issue because there is still a lot you can get out of this book from the things ordinary people could apply. If you are resourceful, you can think of ways to apply his concepts without being the VP or CEO of some financial company.)
Of course, any book will only be as valuable as what you personally take out of it. If you are already a savvy financial guru, then maybe you don’t need to read this. If you have read 10000 financial books, maybe this is too easy or basic for you. If you are intimately connected with the financial sector, again, why are you reading books that are intended for the ordinary masses?
This book is stellar!
- Jai Gupta:
Peter Lynch does such a great job explaining how you do not have to work on Wall Street to be successful in the stock market. One Up on Wall Street provides a great overall foundation for investing and how people can utilize companies they know/understand and products they use and enjoy to make successful investments before the stock catches the attention of the large institutional investors. Lynch stated you only have to be right six out of ten times to be successful in the stock market, and a ten-bagger (stock price grows 1000%) can make someone’s career. Lynch also believed there is a lot of noise with investing, and people put too much effort in the wrong areas. He did not like the most popular or pretty stocks, instead, he liked good, boring companies that will consistently produce cash flow and grow immensely in the long term. I liked hearing how Peter Lynch takes everyday undervalued companies that are commonly used, not just talked about, and studies to see how fundamentally sound they are to invest in. Lynch does not believe in getting caught up in daily stock prices, he sought after undervalued companies that are consistently growing for 5-10 years. Lynch is a prominent GARP investor seeking rapid company growth at very reasonable prices. His amazing track record speaks for itself as he outperformed all other fund managers consistently for over two decades. Peter Lynch offers a lot of very beneficial investing advice in this book and it will be very educational for anybody wanting to get involved in the stock market. I really enjoyed reading One Up on Wall Street and recommend it to all investors.
- Adrian Bercovici Simon:
By far the best book I’ve read on investing so far. While there are a dozen books that cover the basics and tell you what to look for when choosing stocks, this is the first one that tells me as a novice why a particular value on the matters of the financial statements.
Peter Lynch does an awesome job in splitting stocks into 6 categories (slow, fast growers, stalwarts, cyclical, turnarounds, and asset plays).
After separating them, he goes on to explain what to expect from that category and what indices really matter on the financial statements.
On top of that, he provides real decisions that he has made during his career as director of Magellan Fidelity investment fund.
There’s one thing to read in a random book about the balance sheet and there’s another to read on how he bought Ford stock in 1987 based on analyzing Cash vs Long term Debt.
These examples are abundant and are godly for the novice investor to get the nuts and. bolts on how the stock market works.
Terrific read, I recommend it wholeheartedly!
- Ravi rated:
Very interesting read on Peter Lynch’s investment techniques. A good amount of basics and a somewhat more aggressive approach as compared to conservative, academic, stick to indexing approach.
It also helps that the author is at times funny and most of the time makes the content easier to read for people with not much knowledge of economics and finance.
- Mehan Mallik:
The Fundamentals Of Investing
Your next-door neighbors claim to know it. The Youtube channel you have subscribed for investment advice claims to know it. The guy you are a friend with claims to know it. But when asked what exactly is the fundamentals of investing, all you get is a friendly slap on the back and the topic diverts.
But this book finally answers your long-awaited question.
Ignorance is bliss. Count on it.
Peter Lynch lists a ton of examples where not heading to the market analysts and trusting your own judgments and your newly acquired knowledge of the 𝘧𝘶𝘯𝘥𝘢𝘮𝘦𝘯𝘵𝘢𝘭𝘴 𝘰𝘧 𝘪𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 can help you beat the market averages.
Observation Is The Key
If Sherlock wasn’t a detective, given his observational skills, he could have been a great investor. Or even better, a detective and an investor and he could just have prevented Britain’s first-ever financial crash-𝘵𝘩𝘦 𝘴𝘰𝘶𝘵𝘩 𝘴𝘦𝘢 𝘣𝘶𝘣𝘣𝘭𝘦. The point made being is, maybe roaming around your nearest shopping mall might actually be a great thing. Being observant of the shops around you may help you discover new companies, which are doing great and their fundamentals also look fine, you might take a shot at investing in it and end up making a multi-bagger.
Recession??? That Was Unexpected!!!
Peter Lynch says you can’t really predict the next recession. Well, that was the 1980’s, and this is the 21st century. And the last great financial crisis before this pandemic started, which was in 2008 was predicted as early as 2003. Our very own Raghuram Rajan correctly predicted it in 2005. I think with the advancement of the economy as a subject and the very many statistical reports we generate which is far more than that was ever generated in the 1980s, his words hold little value today. And I am writing this in 2020.
Peter Lynch’s obsession with buyback
The buyback was a great strategy to drive up the prices of shares in the 1980s but it is overused today. That’s why the USA government had to bail out the airline industry amid this pandemic because it used up all its cash in the buyback. As they say, socialism for the rich and capitalism for the poor!!!
Buyback is more rampant now more than ever as there is a direct incentivized connection between a CEO’s salary and the share price.
To Think Upon It…
As the review comes to an end, there are also other points which I don’t really agree with Peter Lynch because the market and the economy has changed so much, like diversify doesn’t necessarily
always mean “diversify” as Peter Lynch puts it if a company goes out of its way to buy an unrelated business. Also the unnecessary general hate for the technology industry, I mean think about it, the number of ten baggers and fifteen baggers you could have missed if you stayed out of this hot industry post-2000?
To sum it up, One Up On Wall Street is quite outdated at various junctions but it is still a great, easy to understand book for beginners.
- Vitalijus Sostak:
As for a book written 30+ years ago, it’s still surprisingly relevant!
The book has two intros and the second one alone, written in the late 1990ies, paints markets in colors that are uncannily relevant. Those were crazy times that have many parallels with the current situation:
– stocks growing fast for years, e.g. Cisco up 480x since going public in 1990
– fundamentals do not matter, growth and future prospects are everything (favorite metrics: “eyeballs”)
– huge market concentration, dozen or so big stocks wagging the entire S&P500
– straight parallels from “Nifty Fifty” times.
Moving to the actual body of the book, I’d say it describes a fair fundamental investing philosophy that’s mostly applicable today. The principles are certainly sound: look for smaller (undiscovered) companies, identify products/services that are in vogue, do fundamental research, and set expectations right.
If it sounds boring, that’s exactly what the author is aiming at – best investments are unexciting ones :]
I also liked that Lynch shares his view on overall portfolio management principles: how to classify stocks, how long to hold, when to sell, biggest myths, etc.
All in all – a solid book on fundamental stock picking, it became classics for a reason!
Favorite quote – on a hot industry back then:
“Remember what happened to disk drives? The experts said that this exciting industry would grow at 52 percent a year – and they were right, it did. But with thirty or thirty-five rival companies scrambling on the action, there were no profits.”
Recently got into investing and this book was a solid start. The best way to learn is from the masters, right?
Lynch is one of those people who seems like a stand-up guy. He was not overly smart or special in any kind of way when he started to invest. He was in some ways struggling and hoping for something better in life. He actually even made me laugh when he mentioned you should find some stupid-sounding companies to invest in before they get discovered by Wall Street investors.
I might make this my reread every few years as it is short and to the point. I will also look into reading more of his books as he is very smart and knows what works and what doesn’t.
I’ll let someone else go deeper into what he goes over in the book.
- Deepak Shah:
Peter Lynch likes Math more than he’s willing to admit. I picked up his book because a friend told me that this guy is a value investor (And he is).
A few important points.
1. If the below equation returns a value of 3 or more, you’ve found a really good stock (Of course, you need to follow many other data points).
(EPS Growth [Compounded for last three years]+Div Yield)/PE
2. Earnings are the biggest predictor of price movement. Options/Futures ought to be banned.
It’s very hard to find a book that covers companies from the 70s to the late 80s. Peter Lynch’s book covers it all perfectly. This book has made me refine my KRM (Key Research Metrics)
A book that is ought to be on every investor’s to-read list. He debunks a lot of myth. His explanation on book values.
Overall it’s a brilliant read. I highly recommend this book.