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I was a bit hesitant to read One Up on Wall Street by Peter Lynch because to be frank, I didn’t really like Beating the Street very much.  One Up on Wall Street is the precursor to Beating the Street and was written in 1989.  I had read the mini book of One Up on Wall Street (and gave it away) which had little vignettes and tips from this original book.  I wouldn’t have bought this book since Beating the Street kind of annoyed me when I read it, but my partner had it so I borrowed it from him.

For those of you who don’t know who Peter Lynch is, he was a money manager of the Fidelity Magellan Fund.  He turned a $10,000 investment in the Fidelity Magellan fund into a $190,000 investment.  He had billions of assets under management (it went from $18 million to $14 billion of assets under management, according to Wikipedia).  In summary, he did really well.  Very very well.

Here’s what I think of “One Up on Wall Street”

One Up on Wall Street is an essential read, in my opinion, for anyone interested in investing in the stock market.  It gives you the blue print to investing in the stock market and he shares his logic through the stock buying process.

Before you embark on investing in the stock market, he checks to make sure you have evaluated these three things:

  • Do I need the money?
    • If you need the money anytime soon, you shouldn’t invest in stocks.  You could lose it all or a large portion of it.  He says that you should ‘only invest what you can afford to lose’
  • Do I own a House?
      He interestingly enough talks about why many people will do better with housing than with real estate because people are less ‘scared’ with housing (when you read headlines that the stock market is tanking, you will most likely think about selling your portfolio in a state of panic… this is less likely to happen with real estate because it is more fixed)
  • Do I have the personal qualities that will bring me success in stocks?
    • Finally, you have to have to be detached, patient, and not panic with everyone else is panicking.  If you have these qualities, you will be more likely to be successful with stocks.

What I Liked about One Up on Wall Street

What I liked about One Up on Wall Street was that it is an easy read.  He writes like he’s talking to you.  He is no-nonsense and practical.  I liked how he discourages impulse buying of stocks and listening to what others have for ‘hot stock tips’.  He eschews the ‘next big thing’ and recommends that people invest in boring companies that people will be using regularly.  Just like what Charlie Munger and Warren Buffett would recommend, the more boring and dull the business, the better.

The more ridiculous the business sounds, the better.  In the latter part of the book, he reviews the process he uses to select a stock, and shows the charts to these stocks and also shows you his thought process.  He explains the different type of stocks available:

  • Slow Growers
  • Stalwarts
  • Fast Growers
  • Cyclical
  • Turnarounds
  • Asset Play

What I Disliked about One Up on Wall Street

What I disliked about One Up on Wall Street was that he discouraged people from buying bonds and encouraged readers to invest in stocks only.  The advice in One Up on Wall Street seemed less dated than Beating the Street (even though it is older), however, he still talked about L’Eggs (a pantyhouse that you can buy conveniently in your local convenience store) introduced by Hanes which probably isn’t doing as well as it was in 1989.  Nonetheless, I recently saw L’Eggs in a convenience store in Alaska, so it’s still around!

Other than that, One Up on Wall Street was great and I would recommend this book to anyone interested in investing.  I think that reading One Up on Wall Street and the Intelligent Investor will create a healthy start to your investing relationship and learning process.

Readers, have you read One Up on Wall Street by Peter Lynch?  What did you think of it?

Article comments

Sandy C says:

This book was really influential for me when I started investing. I haven’t read it for ages, but the same key takeaways as you had are ones that have stuck with me. Plus another one: invest in what you know. He says small investors have an advantage to be able to respond quickly when a new opportunity passes into your awareness.

It’s funny that you gave the example of L’Eggs. Being part of the Hanes group of products, that company has been more than a ten-bagger (Lynchism) since the market chaos of 2008-2009. So you could do far worse!

Young says:

@Sandy C- Good point! Well I still saw some L’Eggs in a grocery store recently!