Hello friends, I am Laxman, in today’s article we see chapter 6 of one up on wall street. In chapter 6 stalking the ten-bagger, this chapter includes part-2 is picking a winner. Chapter 6 is all about how to find the stock which stays around us.
Stalking the tenbagger:-One Up On Wall Street: Chapter 6
According to peter lynch, how to find the stock. the best way to find the stock is in your home. So in chapter 6, we see different common steps to find stocks.
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Where to look?
- The best place to look is your backyard, the nearest shopping mall, and also the neighbor. You can also find the winner stock in your working industry of the company.
- So the author gives some examples:
- Pep Boys:- This company produces a car service. so all people only goest to this company. And it also produces car parts, maintenance. So this company produce minimum charges and give good service. so everyone knows about this company, but no one invests in this company. This type of company always stays around us but we can think to invest like this company.(One Up On Wall Street: Chapter 6)
- Kodak:- This company produces cameras. The cameras see everyone second person have this camera. And this company has a monopoly on the cameras. but know no one invests in these companies.
- Orion Pictures: This company produces the movie. So everyone sees movies of Orion’s pictures. and every picture makes a profit, but no one invests in this company. (One Up On Wall Street: Chapter 6)
- Automatic Data Processing: This company uses technology to improve its product. This type of company use technology to improve his company, instead of its technology company. The technology company problem is that it is so competitive. In this competition, the last price is down, and the price is down so the earning of the company is very down. (One Up On Wall Street: Chapter 6)
- Smith kline Beckman:- This is the pharmaceutical company, which produces the one drug on Ulcer drugs. These drugs are so famous and in these diseases, each and every time you have to take the medicine. So everyone buys these drugs but not no one attending the pharma company. If you want to invest in this company, first find out which disease has the regular treatment of drugs. So the type of cancer has this type of treatment every day. (One Up On Wall Street: Chapter 6)
- Glaxo:- This is also the company, which is to produce ulcer drugs. This company replaces the drug of smith kline Beckman. This is all pharma company is produce this drug but no one sees this.
- Good year tires: This is a very famous company. Everyone knows about the product of the company, its service. the employee to the company CEO. This company produces a tire. (One Up On Wall Street: Chapter 6)
So the above example, you can see every company is famous and everyone knows about this company. But people don’t learn to invest in that company. Peter Lynch says, ” You know, which is famous, you also know the tire, movie and also the medicinal company.” So funny thing is that those who work in an oil company employee, This employee see the stock in the Pharmaceutical company. And Doctor is seen to invest in the oil company instead of pharma. Because the doctor knows about the company product and also his earning. but they don’t invest in this.
So the doctor has to invest its own industry because those know the business criteria and also the product information is more than the other company. So do research of own industry and invest in that company for the ten-bagger.
Peter Lynch gives his own example, When peter was a mutual fund manager, and also very well know about financial services. But they invest in the oil company and they miss the financial company. Franklin company produce a good return and become the ten-bagger. So the author misses this company and ignores this company and invests in an oil company.
So this type of company has a hidden asset and only knows that person who works in that company. for example, the book value of land in one company. The price of that land is this buying on time. and in the period the price is going high. So invest in the company to see the hidden asset.
So this is all about chapter 6 of One Up one wall street book.
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