Hello Friends, In today’s article we see chapter 20 of the one up one wall street book. In chapter 20 Peter Lynch explains that 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.
50,000 Frenchman can be wrong:-Chapter 20
The Author says 50,000 Frenchman can be wrong.
So all people follow the crowd the only reason is that they think that much of people are right,
so they follow the crowd, by author say’s 50000 Frenchman are also wrong in the stock market.
So in the stock market don’t follow the crowd follow your own way.
So the author says, those small investors can calmly walk in the entrance when there is a crowd at the existing position. OR
You can exist, when crowded at the entrance position, So at this time you are safe or not killed.
That simply means that The large institution loses interest in any stock, They want to sell that stock.
So in this time, you get a wonderful opportunity in that stock, and you have to analyze that stock.
If that company doesn’t have any problem(earnings are high, profit is good, Plan of future is good, Cashflows also good) but the people sell like crazy.
If they people buy any company at a crazy level, then you have to exist from that opportunity.
Monday Effect:-One Up On Wall Street: Chapter 20
The author says the Monday effect is nothing but,
‘so many people are looking for news on Friday and Saturday and
they will act like buying and selling stocks vigorously in the Market on Monday, that is called the Monday effect.
this effect is very dangerous for the crowd, they will destroy the company and make a 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 only one work is to analyze the company and track the record of the fundamentals of the company.
So you are taking the stress of News then you act like an impatiently
so warren buffet says, ” 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.
The author gives 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 declining, it will decline today, tomorrow, or a few years later. So when they decline that is a good sign of the opportunity. So be prepared before the stock market is decline, with search stocks
- So no one can’t predict the market direction, not for a single year, or someone says I will predict for 10 years so you have to forget about that person. this is not possible.
- If you want to perform wonderfully 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 stocks 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 than 10, I am happy with that.” So don’t try to be right in the stock market on stocks.
- Peter Lynch says, ” Those stocks are the winner stocks they always surprise you.” So the author also doesn’t know this the stock becomes the Multi-bagger.
- You can make more money in the Stalwarts category by making a simple 20 to 25 % gain continuously, so in long term, you make lots of money.
- If any company is performing very badly, and you think another company is not doing badly, so there is no guarantee. So the company economy changes, so every company is can perform badly.
- Whether you are right or wrong does not depend on the price of the stock, for example, let’s if the price is up you say, I am right and if the price of the stock is down, and you are wrong, so this not depends. the right or wrong is only to get while in the Long term investment period.
- In stalwarts you have to focus on only one is ownership of Institutional ownership and how many people are following that stock. So in stalwarts always you get the overpriced company, so understand the fundamental and its Intrinsic price and when the price is down then you have to buy that stock.
- the losing strategy is buying the average fundamental company and you sell that stock that has strong fundamentals but you sell after the price is doubled this is also a losing strategy.
- In the Fast grower category, the Fast grower company is not always the fast grower, you have to attention to when the period of fast growth ends 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 stock, 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 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 stock. you lose 100% of the money in that stock.
- So you can improve your money, by simply rotating the stocks. In rotating you have to switch from one stock to another stock with making a profit from that. So time in your favor you can do that, but if they don’t make them or do not get results then minimize your acts of rotating stocks.
- So don’t try to think like, I want to recover my loss. If you do that then you lose most of the money that is present in your hand.
- don’t stay in past, whatever happened in that past, so be present in the present time.
- you have to focus on 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 the market there are always things to worry about, so don’t worry.
So this is all about the One Up On Wall Street book.
Lastly, we finish this book, so from the next article we see the new book summary.