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One Up On Wall Street book: Chapter 14

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Hello friends, in today’s article we see the one up on wall street book chapter 14. In this book, chapter 14 is fully discussed the company that you are chosen by giving some story to them. In this book chapter 14 of one up on wall street, we see that story is perfectly running or not by rechecking the story. (One Up On Wall Street book)


How to recheck the story:-One Up On Wall Street book

1. Read quarterly reports regularly:

  • You have to check every quarterly company story by checking quarterly reports. So what you think about the company before investing in that and now after the quarterly report is the same thing is remains same or not.
  • And also check the earning is increase or not. the company store, people are visit or not and their product sale is increasing or decreasing. And also the loyalty of product is increase or remain same. (One Up On Wall Street book)
  • For understanding, this concept author gives the example of The limited company.
  • the limited company has 670 stores in the USA, in total store in the USA is about 700. So the company is spread all over the country. so explant the business of the company is there no space for traditional strategy.
  • So if a company want to expand they need the innovative idea to expand. So in that time as an investor, you have to take the exit from this company if the company nothing to do to expand. (One Up On Wall Street book)
  • The author gives another example of a company i.e. Mcdonald’s.
  • Mcdonald’s expand itself in innovative ways, they never stop to expand and increase their profit. When Mcdonald’s spread all over the USA, then they try to found the different or innovative way to make a profit, for example, is dining, breakfast and try to spread in a foreign country. so the company takes the decad of year to spread all over the world. and they also open home delivery. So this type of innovative idea uses to increase profit and spread the company. (One Up On Wall Street book)
  • Another example is the Texas Air company.
  • Texas Air company is when the author found they are in bad condition and after that, they come to the good condition. For this type of company, you have to check the story behind this miracle situation.
  • If any company is bad in fast and now is good, is that not means that this company is not going again bad condition. So for this, you have to check the company story continuously, and always the company in tracking.
  • And don’t become the emotional fool, if the company is good and stay better.
  • So Texas Air is a company that buys the continental company and they do continental company as a turnaround. (One Up On Wall Street book)
  • So the continental company is the low-cost carrier company. So Texas Air company also acquire the Eastern company. And they try to turnaround this company also. But they don’t do, because increase the customer complaints and also the employee union problem. So author also ignores this problem, but they realize this problem.
  • then the author says, they make here two mistakes, 1) Eastern company is becoming turnaround by trying Texas Air company but they don’t realize the employee problem and also their union problem. and 2) Ignore the Delta airline company, When eastern company performance is not good then that time Delta perform a very good job, so whatever the loss of the eastern company, that benefit the Delta airline company. (One Up On Wall Street book)
  • So Delta airline is the major competitor of the eastern company. So those people travel by the Delta and eastern company, they know the problem of the company and also the which one is good or bad.
  • So that people can understand which company gives the perfect investment return.

So this is all about rechecking the story of the company. So if you find the company and make the company analysis and make investment and also you have to focus on that company. I know this is a boring job, for that warren buffet says,” Investing is simple but not easy.” So people can bethink about how much company have in our portfolio, for this Peter Lync says, ” Put that much company in your portfolio, like how many children you have in your family.”

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making an investment is the other part following that company is the important part. So this is all about the rechecking story of the company.

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One Up On Wall Street: Chapter 10

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Hello Friends, in today’s article we see chapter 10 of One up on wall street book. In chapter 10 we see the earning process of investors. let’s see one by one.

One Up On Wall Street: Chapter 10

Earning, Earning, Earning:-One Up On Wall Street: Chapter 10

You read the before all chapter and you get the idea of investment to make money or say earn money. So to this process, you have to ask some thought to yourself in this earning process. this process as follows: (One Up On Wall Street: Chapter 10)

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Think to ask yourself:

  • What makes a company values and also why will it be more valuable tomorrow that is today: At this point, you have to see the company status and ask yourself the value of a company that is whatever is today, it may be changed in the future and which criteria that change in the positive way of company value. If you have a good answer in your thought they buy that company you get the absolute result of that company. (One Up On Wall Street: Chapter 10)
  • Earnings and Stock price move together: If some company stock price is more than the earning value then it is the market fluctuations. So long terms Earnings and Stock price is moving together. If earnings go higher or the stock price is low, then don’t worry the stock price follows the earnings price. that’s why Peter Lynch says Earnings and Stock price is moving together. (One Up On Wall Street: Chapter 10)
  • About the P/E Ratio: There are so many people who make the decision on the P/E ratio. So if you do also then you have to know there are three types of P/E ratio affect the stock. 1)Overprice stock: If the P/E ratio is maximum then, the stock is overpriced by the crowd of investors. 2)Underprice Stock: If the P/E ratio is minimum then, the stock is underpriced. 3)Fairlypriced: The stock price is medium than that stock is fairly-priced. That’s the common people things on the P/E ratio.
  • The author says,” To think about the P/E ratio is like how much time to take the company to recover our investment principle.” if we assume a company on P/E constant means a medium grower company then, 10 to 14 years is required to recover our money. The company is a fast grower then your money is recovered in the 7-9 years, and if the company is a slow grower, then it takes 14-20 years to recover your money. (One Up On Wall Street: Chapter 10)
  • Compare P/E ratio with industry and historical data: That you the right value of P/E which is not be followed by a crowd of investors. If you compare the P/E with historical and industry P/E then you the P/E ratio is bargain able or not. so always compare yourself with others.
  • Avoid stocks with high P/E: This type of company is followed by the big institutional investor and you have to wait in this situation time. Here our Patience quality is checked. (One Up On Wall Street: Chapter 10)

So Peter Lynch gives 5 ways that increase the earnings of the company. if the company is earning then the stock value is increased. that way as follows

5 ways to increase earnings:

  1. Reduce cost: If you want to increase earnings of your stock then, check the company expending in which area that can be reduced by any reason, if the company is doing, then your price earning is increased. So check to reduce cost.
  2. Raise Prices: If a company is increasing the price of the product, then they are directly proportional to the earnings. So check for the product price and also see the price of the limit of the product can be increased. (One Up On Wall Street: Chapter 10)
  3. Sell more product in the existing market: Check for the company sales rate, if the company is doing great sales and sell more product then it’s ok for the earnings purpose.
  4. Expand into the new market: If a company is moving and expand the whole over the country and globe then the price of earning is increasing because the company gets more sales and sells the product. So check for this purpose also. (One Up On Wall Street: Chapter 10)
  5. Close or dispose of a losing operation: Check for the unworkable machine, or the department and this company is tried and close all of his department then the price of earnings is increases.

 

This is all about the 5 ways of earning in the company, and also chapter 10 of one up on wall street book.

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