In this article we will cover Book Summary of “One Up on Wall Street”
Do you feel difficulty in selection of Stocks?
Do you find it difficult to manage your Stock Portfolio? Or Even Don’t know how to make a Stock Portfolio?
Read this article this is for you.
Look around, there are so many brands available, we buy their products or use their services in our daily life.
Have you ever checked most of company behind your favourite products are listed on Stock Exchange? You can buy their shares and easily become Shareholder in the Company.
For example, most of you visit multiplexes to watch movies.
Top two companies run maximum multiplex screens in India are PVR and Inox Leisure.
Both of them are listed on Stock Exchange.
You know very well that when standard of living is improving, People love to spend on hang outs with family. This is the reason, entertainment Industry has bright future in India.
Based on your experience you can find which one is good, PVR or Inox? and buy shares of your Favourite Multiplex Chain Company.
This method of Stock Selection is beautifully explained in “One up on Wall Street”.
One up on Wall Street is written by Peter Lynch, the great American Investor who has found many of his “Multibagger Stocks” with this simple method.
One up on Wall Street is most favorite book of many successful Investors. We highly recommend this book to you, if you want to be a successful investor.
Once you go through this summary, you will definitely want to read this book completely. If you want to buy this book, CLICK HERE.
Now, Let’s discuss top interesting topics covered in this book
Need Not to Be an Expert in Stock Picking
A Common Man with minimal or zero Stock Market knowledge can also easily select quality stocks and make a great stock portfolio just by using his common sense.
Look around, find some good companies having great products. Check whether they are listed on Stock Exchange.
Check out company’s performance in last few years. Use some common sites such as moneycontrol.com, screener.in, business-standard.com, etc.
You can also find a good company in the same industry in which you are working or companies in your profession. The benefit of this is, you understand these companies better than others.
Different Category of Stocks
In One Up on Wall Street, Peter Lynch has divided stocks into different categories based on their characteristics. Now, Let’s Discuss them one by one.
#1 Slow Growers
These are large companies already expanded so much. Now no more expansion is possible. Generally, growth rate remains very low in these companies. This is why they generally announce good dividend. Fortunately, in a developing country like India, you will very rarely find any slow grower.
These are big companies. Growing with a steady pace. These are safe investment and you will not find much volatility in their price.
One thing you should keep in mind is that buy these stocks in correction. Buying them at high valuations will not give you good returns.
So, entry level is very important in these stocks. Some examples of Stalwarts in India are Infosys, Reliance Industries, SBI Bank, IOCL, ONGC, etc.
#3 Fast Growers
As the name suggest these stocks are Fast Growers. Enjoying any moat (competitive advantage) such as strong entry barrier, technological advancement, strong client loyalty etc.
You can find some possible Multibagger Stocks in this category. But they carry risk as moat could end up due to change of government policy, entry of new players or any global factor.
Some examples of Fast Growers are HDFC Life, Inox Leisure, HDFC AMC, Aarti Industries, Amber Enterprise etc.
#4 Asset Plays
For asset plays, valuation of company is not done based on its business but based on Assets a company possess. Few companies’ assets have more worth than its market cap and they are prime candidate for asset play.
Some examples of Asset Plays are Godrej Agrovet, Adani Ports, DLF etc.
Cyclicals are linked with economy condition in country or at global level. Generally, they outperform when there is boom in economy. But, when economy underperform these stocks also start showing heavy correction.
Metal and Auto Stocks are good example of Cyclical Stocks. It’s always better to buy cyclical stocks in down trend or near bottom and sell them when they are in uptrend.
Few examples of Cyclicals from Indian Stock Market are Vedanta, Nalco, Ashok Leyland, Maruti, Tata Steel etc.
Turnarounds are those companies, which are currently loss making, having high debt or facing financial crisis. But, having potential to outperform and come out of these crisis.
If you could predict Turnaround earlier, it can generate good returns.
Possible candidates of Turnarounds in Indian Stock Market are Yes Bank, Tata Motors, Vodafone Idea.
Other Important Points discussed in this book are
- Benefits of comparing PE of one company to other Players in same industry
- Relevance of Institutional Ownership
- What it indicates, when Insiders are buying?
- Importance of consistency in growth rate
- Speciality of Low or Zero Debt Companies
- Difference between Diversification Vs Diworseification
Now, I am sure that you find this book very interesting. So, if you want to buy it you can CLICK HERE.
Disclaimer: Stocks referred in this article are just for education purpose only. We are not giving any Buy or Sell recommendation in this article. Please do your own research or consult with an expert financial advisor before investing in Stock Market.