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ONE UP ON WALL STREET Peter Lynch e John Rothchild How to Use What You Already Know to Make Money in the Market ADVANTAGES OF SMALL STOCKS POKER INVESTOR X BONDS 1 STUD Exposed to local The growth of stocks is on your side. The stock market is like the businesses before In bonds, the best you'll get is the game of poker. There is a lot of professionals interest rate. information available if you know where to look. Knows more about a niche and has access to information before the If you are risk averse, stick with bonds, but don't dream of a a market stock that can multiply your capital "Winners increase their stakes No group mentality Can buy companies when they are by 10x (or more). as their position strengthens and still small leave the game when the odds "When you invest in stocks, you have to have a are against them. Losers stay basic faith in human in capitalism,i the until the end." "This is where the smart money country as whole and in general prosperity. isn't so smart, and the dumb money isn't really as dumb as thinks. MIRROR COCKTAIL THE SIMPLER 2-MINUTE TIME TO LEAVE TEST THEORY THE BETTER DRILL "If you Ask yourself Pay attention to the Invest in companies with know why before cocktail. If everyone runs simple business models, Tell in 2 minutes you bought investing: away when it comes to from a simple industry. the stock story a stock in Do have a house? stocks, the market is down Something boring- so that even the first 2) Do need the money? and it's a good time to with a boring a child can place, you'll automatically 3) Do have the personal enter the market. name in an unattractive understand what makes the have a better idea of when qualities needed to be If even the dentist is giving industry. company successful and what to say goodbye to it. successful? you investment tips, it's Visit the company and pitfalls are in the way. time to leave the party. learn about it. Avoid Avoid Avoid Avoid Avoid Avoid HOT THE NEXT WHISPERED DIWORSEIFICATION SELL PREDICT INDUSTRIES SOMETHING TIPS EARLY THE MARKET When analysts predict When they extol stock as Recommendations that Companies that waste people automatically "Predicting markets double-digit growth the next it reach your ear like a money on silly sell the winners and keep their and anticipating forever, the industry marks the end of prosperity often are high- acquisitions that which is as sensible as recessions is impossible, starts decline for the imitator as well as the risk stocks don create value watering the weeds while I'm happy to look for original. pulling out the profitable companies" BY PUTTING YOUR STOCKS INTO CATEGORIES YOU'LL HAVE A BETTER IDEA OF WHAT TO EXPECT FROM THEM SLOW STALWARTS FAST CYCLICALS ASSET TURNAROUNDS GROWERS GROWERS PLAYS growth. Growth of 10% to Growth of 20% to Depends on the Valuable assets Companies in difficulty, There's nowhere to 20% p.a. 30% p.a. direction of the ignored by analysts. in judicial recovery. expand. They are great TENBAGGERS paradise. economy. Cash, Real Estate, They don't grow. Good dividend payer. protections in Moment of buying and Ores, Patents, Tax highs and lows are not The price won't go economic recessions Time to sell: selling is essential. Credits related to the market up much. and depressions. Trick is to find out in general.You can buy Eg: Electric sector when they will stop airlines, commodities Time to sell: enough stocks with Time to sell: growing and how When a new buyer significant impact if Time to sell: 50% gain in 2 years much to pay for their Time to sell: comes along or a big you are correct. 30% to 50% gains is excellent. growth. When the price starts investor who has or fundamentals Very high P/E, tend P/L absurd and to fall for no apparent discovered the Time to sell: have deteriorated. to always return to illogical. reason. hidden asset. Soon after showing that average. When the media extols Commodity price they are recovering. the CEO too much,Wall starts to fall. Street constantly raises Signs that cycles are the target price. coming to an end. TX