Beating the Street should be required reading to all who wish to pick stocks. The author, Peter Lynch, was the widely successful manager of the Fidelity Magellan Fund averaging about 30% returns for 13 years. Despite his success as a mutual fund manager, he strongly believes that individuals can outperform Wall Street fund managers if they are dedicated enough to be thorough and follow some common sense rules (numbered and in bold throughout the chapters and on
this website).One thing that makes Lynch unique in his investment strategy is that there is no overarching strategy. He searches for undervalued companies in ANY sector and therefore had to become somewhat of an expert in all of them. Each chapter tackles a different type of investment (mutual funds, commodities, retail, financial, etc) and gives the formulas and sample numbers specific to that sector.
Where I found it:
It was one of the recommended readings at the end of the book “Rich Dad, Poor Dad”. I requested the book from my local library. I then went to browse the for sale books, turned around and canceled my request when I saw it sitting right there for $0.25.
What I learned:
The main thing I learned from this book is that I am not interested in stock picking. I simply do not have the time to do anything in depth consistently. I could research a few companies here and there, but not with enough depth to make solid comparisons or enough regularity to be nimble in my investments. I am very glad I learned that before working from the other direction for a few years first.
However, if I were to start stock picking, I would use this book daily. Every chapter is so well put together and despite having never read about the stock market before, I felt like I could see the picture.
Recommendations:
I actually enjoyed this book quite a bit. For a technical book on stock market analysis it had me laughing out loud quite a few times. It is full of stories and examples, some entertaining enough to share with your spouse and friends.
It is also important that you know this is a somewhat advanced book. I read it very early in my financial journey and it was extremely difficult for me to understand many parts. I didn’t even really understand what a stock was when I started. I read several sections at the computer so I could Google terms that he seemed to think were common that I had never heard before. It is impossible for me to know if I would still feel that way had I read it a few years later, but I imagine the book would be easier for someone with more prior exposure to the stock market.
That being said, I still gave the book away to my 14 year old nephew because he had the same determination I had to read it and understand it. Interest has a lot more to do with who I recommend the book to than age. If you ever consider stock picking, read Beating the Street first!
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