Stock-market

This book, written in 1993, simultaneously comes at the end of Mr. Lynch's career in money management and the beginning of a long sprint in the broader stock market, largely fueled by tech/internet stocks. In any period, one can expect 1 of 100 money managers to far outperform both his or her peers and the broader market by chance. Mr. Lynch was that one money manager.

Mr. Lynch starts the book by turning investing into a game. Although his method was subtle (using an example of grammar school kids picking stocks), the implications are profound. Investing does share some resemblance to many games we play in life, and one of the Great Money Masters, the fictitious 'Adam Smith' readily admits this in his classic book on investment, The Money Game.

However, Mr. Lynch takes things one step beyond the game, and as the book's title hints, he turns all investment activities into a competition. In so doing, he pits the small investor against the institutional Players, and as a result, sets up the naive reader to walk a well-trodden path littered with sorrow and the bones of many foolish investors.

Granted, 'Adam Smith' once said, "The Players aren't smarter than you. They just have more information", and there also is a certain level of truth to Lynch's assertion that the Little Guy can outperform the Big Boys. However, Lynch fails to disclose one important and critical difference.

I believe it was Hemmingway who said, in response to Fitzgerald's observation that the rich were not like the ordinary schmuck, that "Yes, I know. They have more money." Something frightfully similar can be said of the key difference between the Little Guy and The Players, but with one critical insight: The Players do not merely have more money, they have a lot more of Other People's Money. That in essence is the fundamental difference between The Players and the Little Guy, who must wager his (or her) own hard-won funds in order to play the Grand Game- the stock market.

Needless to say (but will be said anyway), the consequences of one's actions weigh heavily on one's shoulders when one's own money is at stake, but really aren't felt when Other People's Money is on the line. The Players play with Other People's Money, but you, dear investor, play with your own hard-won earnings. That said, the intelligent investor must ask herself, 'Do I really want to play with my money?'.

Beating the Street rests heavily on this undisclosed truism and a host of faulty assumptions. The book really is a sales pitch to buy stocks and to participate as much as possible in stock mutual funds. To that end, Mr. Lynch places before the reader a number of questionable arguments. Here are just two:

First, perhaps the most flawed argument of the book is that the small investor, upon retirement, will spend more than she earns in investment income. This is stated as a bona-fide fact when in reality, it is a generous assumption. From this assumption, Mr. Lynch then argues that one should invest in stocks and use some portion of the capital appreciation in addition to the dividend income for the purpose of meeting one's spending needs. He then fortifies his argument by citing inflation and emphasizing its ability to erode fixed income.

The facts are 1) how much investment income you will need is determined by how much you plan to spend, 2) many people choose to work either part-time or full-time after retirement (either out of necessity or desire), and thus have some supplemental income, 3) though the general historical trend for stock prices has been 'up', there is nothing that says that stocks have to go up, and finally 4) inflation can adversely affect stock prices (and have actually done so in the past). Lynch invokes the inflation argument when trashing bonds, and abandons it when touting stocks, even though inflation acts on both. Nor does his idealized comparison of stocks vs. bonds on pages 52-56 take into account taxes and transaction costs incidentally.

Second, on page 69, Mr. Lynch boldly says that, "If you plan to to stick with a fund for several years, the 2-5 percent you paid to get in will prove insignificant". This last statement may actually be worse than his first (of many) flawed arguments, for the following reason: the money lost to the load fails to compound at whatever investment rate of return, and over long periods of time, the difference between what you committed and what gets actually invested grows- and this is before we even consider the effect of annual expenses.

These and other flawed but superficial arguments for stock investing make for very difficult reading. Apart from the gross argumentative errors, the book presents many of Mr. Lynch's reminiscences of a stock market long gone. However, there are some useful hints in the book, most likely put there by Mr. Rothchild, but they are far outnumbered and over-shadowed by Mr. Lynch's deceptive pitch to buy stocks.

They've has done it again, this book is very funny and filled with useful tips from seasoned investor Peter Lynch. This book has several of "Peter's Principles" (which are very humorous one-liners that make a lot of sense for investors.) My favorite parts of this book are: The story about the St. Agnes 7th grade portfolio managers (these kids beat out 99% of fund managers when they had a two year gain of 70%.) Another part of this book that I enjoy are the subtle tips for evaluating stocks. Mr. Lynch doesn't tell you to do this, that, and another thing to find the ten-baggers, but he does give clues throughout the text.

Reed Floren

My profession is writing, but my business is investing. With over 50 years of experience in the stock market and having made millions, I think I know what's up. Not only is this book definitive on stock picking, it is also fun and easy to read and the author's humanity comes right through. And the core message that you can do better than the fund managers (for a variety of reasons) is, from my own experience, true. Try Lynch's system: What worked for him, might work for you. Oh yes, by the way, this book is mainly a repeat and better version of his previous work and represents a more masterful and confident telling of the ways to beat the street.

Jack Bernstein is just brilliant. His forecast of Y2K market crash and rising energy price were just plain accurate. This is the same man predicted crash of Japanese Nikkie in late 80s. His prediction are largely derived from historical data and facts. Very thorough and methodical analysis. It is a must read for every traders and investors. I wished I have read this book in 1999 and could have saved me tons of money.

The basic premise of this book is to long stock and delta hedge w/ out of the money warrants. This was great when the tax incentives encouraged corporations to sell bonds w/ detachable warrants rather than selling convertible bonds. In addition, valuing the warrants was tricky prior to the use of the Black-Scholes model. This strategy - delta neutral covered calls - is profitable when the market has peaked out but you can get your handed to you if you employ it in a scenario such as '99-'00. Further their reocmmendations that you short more as your warrants fall is very dangerous - shorting a lot of gamma. The warrant game played itself out and the authors made a a lot of money. This is a very interesting book written by a very profitable hedge fund manager, but I would not recommend attempting to replicate this strategy w/ LEAPS. Pricing is much tighter now so your margin of error has dramatically decreased

Agree with much of the prior review. That said, if you can find thinly traded warrants (i.e., where there is less pricing efficiency due to the low trading volume), this book presents a very workable strategy for the individual investor. In addition, the book does outline an approach for hedging the "warrant component" of convertible bonds. In my opinion, the key is to stay in the low-volume (and, therefore, more market in-efficient) securities, so that an individual investor can use one's small size as an advantage by trading where the larger funds cannot.

Well, what can I say. As a novice in relation to finance this book was indispensible in giving me tips that has turned a $2000 investment in March this year into over $6000. This man is a genius.

Despite recent controversy, this is still a great down to earth book that will make you a better investor. One good idea can be worth big money. There are many good ideas and advice within the pages of this book. Especially well suited for those starting an investment club.

The Beardstown Ladies Investment Club has become a legend in investment club lore. This book has inspired thousands of individuals to get into the stock market. It's not for nothing that NAIC's "Official Guide" is emblazoned on the cover "From The People Who Taught the Beardstown Ladies," since the Ladies' success required in large part NAIC's move into a larger headquarters building a year or so ago! The book is an easy read, even before you get to the recipes at the end, and why not? Who said investing was rocket science, anyway? Personally, I would quibble with a few of their guidelines for stock investing -- the Ladies require a stock to have a Value Line Timeliness rating of 1 or 2 before they will consider buying it, but since Timeliness is a short-term measure, I think it's pretty irrelevant for the Ladies' long-term, growth stock investing methods; the Ladies say they won't buy a stock over $25, but odd-lot differential surcharges disappeared a long time ago, making this an old-fashioned notion about the need for buying in round lots (and to their credit, Betty Sinnock, one of the Ladies, now reports that this rule is no longer in force). Still, by following the strategies outlined in this book, an investor would surely find investing success. Like other successful individuals in any field, the Beardstown Ladies have withstood their share of vitriolic attacks from financial professionals and the media, but the well-deserved accolades have most certainly overshadowed the self-serving criticism. The Ladies have obviously enjoyed being a part of their investment club. Returns from fellowship and friendship are much harder to measure than the returns of a stock portfolio, but just as important in the scheme of thing and more easily forgotten -- a lesson not lost on the Ladies of Beardstown.

Reading the Beardstown Ladies Common Sense Guide to Investing two years ago excited women in my little town (pop.6500) causing us to use the Beardstown guidelines to form 3 clubs. We have experienced returns from 25.6% to 27% on our respective portfolios - certainly better than money market funds or other methods of saving. The guide is easy to read; easy to understand; although the stock selection guides are not a piece of cake but well worth learning. I reccomend this book to anyone wanting to find a better way to save for their future retirement.As a final note we also have one men's club (they are not as adventurous, maybe!) and we are in the process of forming 2 more 15 member clubs making a total of 5 womens clubs and 1 men's club! All using the Beardstown concept!!!! Many Thanks to the Beardstown ladies!

If you're looking for specific methods for trading or investing you'll be disappointed. Most of his advice reads like a collection of conventional investing wisdom, with his own bent. It's almost like a theory of investing and he doesn't give specific techniques or examples. More "Look to do this or that". Much of it is vague. Lists over 20 indicators to look at, suggestions on what to look for, but there are no examples or charts. It reads like a general overview of his investing philisophy or a primer. You won't come away with any new techniques. The main theme is don't buy and hold, there are times to go short and look at the big picture.

He does touch on cycle theory and Elliot wave briefly. He list many sentiment and breadth indicators to look at or calculate. Some can be gotten through data services, others you have to calculate by hand from data from sources like Barrons. I was expecting a lot more from someone with his reputation. There was no solid material here.

The book was very straight forward and very interesting,. I have found alot of the information was true.

I just finished ready this book for the second time. I had ordered it prior to release on the basis of Harry Schultz's reputation, alone. This book is worth ten times it's cost. If you are committed to wealth creation, if you are willing to do the work and are open to other's opinions, then read this book. Harry does not preach the merits of technical analysis; he presents the history of market action, correlates it to technical indicators and lets the reader accept or disregard the evidence. He also challenges the "Ameri-central" view of geopolitical and geoeconomic events and activity, and further challenges the reader to seek the most accurate information on which to base decisions. Lastly, he's a fluid and entertaining writer. The book is filled with relevant quotations from Dow, Churchill and Emerson.