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One Up On Wall Street SUMMARY Conclusion Chapter 20 – 50,000 Frenchmen Can Be Wrong

The market, like individual stocks, can move in the opposite direction of the fundamentals over the short term Be optimistic about America and investing in general Market declines are great opportunities to buy stocks in companies that you like You can never predict the market It takes years, not months to produce big results You can make serious money by compounding a series of 20-30 percent gains in Stalwarts Stock prices often move in opposite direction but the long term, the direct and sustainability of profits will prevail Buying a company just because its cheap is a losing strategy Selling an outstanding fast grower because its stock slights overpriced is a losing technique You don’t lose anything by not owning a successful stock Stock doesn’t know that you own it Don’t be attached to a winner Don’t stop monitoring the story If you don’t think you can beat the market then buy a mutual fund Keep an open mind to new ideas Read One Up On Wall Street by Peter Lynch Chapter 19 full su
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One Up On Wall Street SUMMARY Part 2: Picking Winners Chapter 10 – Earnings, Earnings, Earnings

Find out what makes a company valuable

If you are buying how much should you pay?

It comes down to earnings and assets

It can take years for the stock price to catch up with the company’s value sometimes

Examples of assets: real estate, machineries and everything that can go in a giant garage sales if you choose to go out of business and liquidate

If the liabilities are higher then the result will be negative

Compare the earnings line with the stock price

Stock price will always come back to earnings

You can identify whether a stock is overpriced by comparing with earnings

The famous P/E Ratio or price to earnings ratio is a useful measure whether a stock is overpriced or under-priced
Take the price of a stock and divide it by the company’s earnings for the prior 2 months
Example of P/E ratio of 10 tells you that it will be 10 years to earn the original investment back
A broker can give you the historical records of PE Ratios and track several years before you buy
Avoid stocks with extremely high PE ratio

Future Earnings

If you can’t predict future earnings, you can find out how a company plans to increase it’s earnings.

There are 5 basic ways for a company to increase it’s earnings 

Reduce costs

Raise prices

Expand into new markets

Sell more of its products in the old market 

Revitalize, close or  dispose losing operations


Read One Up On Wall Street by Peter Lynch Chapter 9 full summary here 👇:
http://mysweetluck.blogspot.com/2020/08/one-up-on-wall-street-summary-part-2_25.html

Watch One Up On Wall Street by Peter Lynch Chapter 8 full summary here 👇:
https://youtu.be/jVN_MGUcm0s

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