Beating the Streets
-Peter Lynch
The book explains the different types of investment strategies apart from the
money market investments like CD’s, bonds, T-bills, etc. It states that in
previous decade the stockbroker’s data base was useful for investment
decisions, mostly these stockbrokers were students of particular industry.
The book states some important points to remember, so that the portfolio
department avoids the mistakes;
A good company usually increases its dividend every year.
It takes short time to lose money but long time to earn it back.
The stock market isn’t really gamble if you pick good companies stock
based on their performances and what you think and not on stock prices.
Research about company before investing the money in particular stock.
Diversifying while investing in stock.
Invest in multiple stocks as out of every five stocks you pick one may be
great while the other be bad.
Always do homework before investing in stocks.
There are some gold rules mentioned that a fund manager should follow are
stated by the writer
It takes time to make money; losses can happen quickly.
Choose stocks you understand and ignore macro-predictions.
Expect and embrace market downturns sticks to manageable portfolio
size.
Focus on fundamentals, not hot-industry hype.
The book is highly practical example-driven manual on how everyday investors
can outperform by focusing on simple business fundamentals knowing the circle
of competence, and being emotionally and mentally prepared for market ups
and downs.
One Up on Wall Street
-Peter Lynch and John Rothchild.
The book act as an investment guide for individual investors. It’s based on the
everyday experiences and common sense of an investor. The book breaks
investing into three parts: -
1. Preparing to invest i.e. one’s personal readiness, patience and
independent and independent thinking.
2. Picking stocks as in he explains six stock categories, ten beggar is
stock whole value appreciates 10x its original price i.e. 1000%
return and the use of PEG and P/E ratio.
3. Managing a portfolio i.e. long-term holding, trimming winners
capitalizing on market dips.
It also states the constraints faced by professional fund manager like size
limits, mandates or rules restricting small or niche stocks, while individual
don’t. The Wall Street is called oxymoron (being small and gives advantage
to individual.)
The six stock types and tailors’ strategies identified by Lynch are accordingly:
Slow growth- big, stable, dividend-paying
Stalwarts- moderate growth (10-12%)
Fast Growers- high-growth small companies (20-25%)
Cyclicals- tied to economic cycles
Turnarounds- recovering business
Asset Plays- firms with undervalued assets.
Overall, one needs to use common sense and daily observations. Focus on
company fundamentals, valuation and category. Lastly be patient and research-
driven.
The Intelligent Investor
-Benjamin Graham
The book teaches the principles of value investing, focusing on long-term
strategies, rational thinking and emotional discipline. The author Benjamin
Graham and mentor to Warren Buffet emphasizes that success in investing
doesn’t come from brilliance but from being disciplined, patient and
unemotional.
There are different long term strategies that the writer has mentioned about the
psychological readiness and speculative market behavior.
One of the core ideas is the distinction between investment and speculation,
where he advises the investors to make their base decisions through analysis,
aiming for safety of principal and satisfactory return. Anything apart from this
is speculation. He has also introduced a concept of Mr. Market, a fictional
character representing the markets emotional swings, and advises investors to
take advantage of market rather being influenced by it. The book emphasizes
the importance of margin of safety, which means investing with a buffer to
reduce risks.
Graham also divides the investors into two types: Passive (defensive) investor,
who focuses on simple, low-risk portfolio with minimal effort, and the Active
(enterprising) investor who seek better returns through more intensive research
and selective investments.
Throughout, he warns against following market trends blindly and stress the
need for a rational, disciplined approach to investing. Overall, the book teaches
that success don’t come from outsmarting the market but by cultivating
patience, knowledge and sound principles.
Mastering the Market Cycle
-Horward Marks
Horward marks, an investor and co-founder of Oaktree Capital, explains
the importance of understanding the market cycle as in economic, credit
and investor psychology cycles to make better investment decisions. The
core idea is that by mastering these cycles, investors can position
themselves wisely, rather than trying to predict the future.
Marks emphasizes that markets move in predictable cycles such as
economic growth and recession, bull and bear markets, and credit
expansion and contraction that are influenced by investor psychology,
economic conditions and external events. He argues that while we cannot
predict the exact timing of market turns, recognizing where we are in the
cycle allows investor to make better judgements about risk and
opportunity.
The book advocates for a contrarian (i.e. opposite) approach by being
more aggressive when others are fearful and cautious when others are
greedy. The book takes us through real-world examples and practical
insights; he provides a framework to help investors avoid the pitfalls of
market extremes and improve long term investment performance by
focusing on cycle awareness rather than market forecasting.
“You can’t predict. You can prepare.”
Horward Marks highlights that superior investing doesn’t come from
predicting the future, but from being aware of where you are in the cycle
and acting accordingly.
