Hello Friends, In today’s article we see chapter 20 of one up one wall street book. In chapter 20 Peter Lynch explain the 50,000 Frenchman can be wrong in one up on wall street book. So let’s see chapter 20 of one up on wall street book.
Previous Chapter
50,000 frenchman can be wrong:-One Up On Wall Street: Chapter 20
The Author say’s 50,000 frechman can be wrong. So all people follow the crowd is only one reason is that they thick that much of people is right, so they follow the crowd, by author say’s 50000 frenchman also be wrong in the stock market. So in stock market don’t follow the crowd follow the your own way.
So author says, those are small investor can calmly walk in the entrance, when there is a crowd at the exist position. OR
You can be exist, when crowd at the entrance position, So in this time you are safe or not killed.
That simple means is that, The large instituational lose the interest in any stock, They want to sell that stock.
So in this time you get the wonderfur opportunity in that stock, and you have to analyse that stock.
If that company don’t have the any problem( earning is high, profit is good, Plan of future is good, Cashflows also good) but they people sell like a crazy.
If they people buy any company at crazy level, then you have to exist from that opportunity.
Monday Effect:-One Up On Wall Street: Chapter 20
Author says Monday effect is nathing but, ‘the so many people are looking news at Friday and Saturaday and they will act like buying and selling stocks vigorously in the Market at Monday, that called as the monday effect.
this effect is very dangerous of crowd, they will destroyed the company and make the tonne of loss of money.
So don’t take the stress of news and don’t act in the market like buying and selling in huge profit margin time.
You have the only one work is that to analyse the company and tract the record of fundamentals of company.
So you are taking the stress of News then you act like a impatiently so warren buffet say, ” Stock market is the vehicle of transport of money from impatient people to the patient people.”
So as possible as stay away from the news.
And don’t become the part of Monday effect.
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Author give the some points from part-3 of this book
Points to remember from part-3: -One Up On Wall Street: Chapter 20
- Whenever the stock market is decline, they will be declive today, tomarrow or few years later. So when they decline that is the good sign for opportunity. So be prepared before stock market is decline, with search stocks
- So no one can’t predict the market direction, not for a singal years, or some one say’s i will predict for 10 years so you have to forgot about that person. this is not possible.
- If you want to perform wonderful in the market, then don’t try to right at any time. so peter lynch says, ” you can make the world record by selecting 10 stock and 6 is the right stocks.” So don’t try to make money in every business. for this warren buffet says, ” I don’t want to make money in every business at 20% annual interest rates, if i get less that 10 , i am happy with that.” So don’t try to be right in stock market on stocks.
- Peter Lynch says, ” Those stocks are the winner stocks they always surprise you.” So author also don’t know this is the stock is become the Multi-baggar.
- You can make more money in Stalwarts category by making simple 20 to 25 % gain continuously, so in long term you make the lots money.
- If any company is perform very bad, and you think other company is not doing bad, so there is no guarantee. So company economy change, so every company is can be perform bad.
- You are right or wrong is not depends on price of stock, for example let’s if price is up you says, i am right and if price of stock is down, and you are wrong, so this not depends. the right or wrong is only get while in the Long term investment period.
- In stalwarts you have to focus on only one is ownership of Institutional ownership and how much peoples is following that stocks. So in stalwarts always you get the overprice company, so understand the fundamental and it’s Intrinsic price and when the price is down then you have to buy that stocks.
- the losing strategy is that buying the average fundamental company and you sell that stock which have the strong fundamentals but you sell after price is double this is also losing strategy.
- In Fast grower category, Fast grower company is not always the fast grower, you have to attention on the when the period of fast growth is end and which is the best time to exist for you?
- So if you don’t buy any stock , you can’t lose the money in that stocks, so don’t try to trap in that thinking is like, if i am buying that stock , i will increase my wealth by 50% annual interest rate.
- So don’t attach so much with winner stocks. if you do that then you are forgot about that stock to track.
- If any company stock price is going zero, here doesn’t matter how much price you are buying that stocks. you lose the 100% money in that stocks.
- So you can improve you money, by simple rotating the stocks. In rotating you have to switch from one stocks to another stocks with making profit in that. So time in your favour you can do that, but if they don’t make the or not get result then minimize you acts of rotating stocks.
- So don’t try to think like, i want to recover my lose. If you doing that then you lose your most of money that present in your hand.
- don’t stay in past, whatever happen in that past, so be present in the present time.
- you have to focus on the reaching your financial goal or financial freedom
- If you think, you can’t beat the market then go through the mutual funds.
- So lastly, in market there is always any things to worry, so don’t worry.
So this is all about the One Up On Wall Street book.
Lastly we finish this book, so from next article we see the new book summary.