peter lynch portfolio

One Up On Wall Street: Chapter 12

February 4, 2021 by Laxman Sonale 3 Comments

Hello friends, in today’s article, we see chapter 12 of one up on wall street book. this chapter helps you to know more about the company by asking simple questions. One up on wall street book chapter 12 helps you to find out the best questions you have to ask the company and broker.

Previous Chapter 11

Getting the fact: One up on wall street chapter 12

In this chapter, you get more information about the stock by asking the following questions. if you want to know more about the company ask the following point. (One Up On Wall Street)

1. If you have a full-service broker, ask them some good questions:(One Up On Wall Street)

How you classify this stock as a cyclical, slow grower, fast grower. in this situation most of the time they fast, grower, because they are giving you advice about the stock.(One Up On Wall Street: Chapter 12)
then again ask about Recently growth in earning. What is the P/E ratio from a historical level?
If they tell you to buy now this time, then ask why now buying is good? And this company before buying is why not good? What happens suddenly in the company?
What is the company business and which business comes with maximum profit and how much spending on the growth of the company? (One Up On Wall Street)
How finance the company by doing issuing equity or taking maximum dept?
in this company any insider buying or not and give the analyst report of your analyst, I am study first and then come again ask you some good questions.
You have seen the price and earing report charts report of five years. And also ask the dividends of the company if the company is giving the dividends, then ask how much time pay the regular dividends and any growth in dividends in history to today. (One Up On Wall Street)
In the company is there any institutional ownership or not, if the answer is yes then check how much ownership is there in the company. if the institutional ownership is more then is a good sign for the company.
How many times your analyst follow this stock.

2. Call Investor relations: (One Up On Wall Street)

You can ask some questions directly to the company by using call investor relation. Then ask some question they are as follows
Plan of the company for debt reducing, and what is about that recently launch the drug, if they are a pharmaceutical company or that product. (One Up On Wall Street)
what is the effect on earnings? and how much sales of that recently launched the product in this year?
In this year how much company is opening a new outlet? and also how much percentage the market share increases?
The company is operating at the full capacity of the plant. yes or no.
Properties in the balance sheet that market price value are how much?
If you don’t have any above stuff question, then ask simple two questions 1) What are the positive of the company this year and 2) What is the negative of the company this year. (One Up On Wall Street)

3. Visit the company’s headquarters:(One Up On Wall Street)

Visiting company headquarter ask these questions, they are following
Any fund manager or analyst come in this headquarter. If come in two or three year then, this is a good sign for us, because this company is not followed by any fund manager or analyst.
If the companies headquarter is situated in like that place is not easy to like everyone to go and see.
The good earning and cheap headquarter is a good sign for us.(One Up On Wall Street)
If the company headquarter is used expensive furniture and expensive things in headquarter, then this company is not using the right place of money, so this company loses earnings in the future. So peter Lynch gives some examples is Pepboys and crown cork and shield.

4. Attend annual meetings:(One Up On Wall Street)

you can attend the annual meeting of the company, and talk to executives about the company.
Peter Lynch meets the company executive of XYZ company and ask about that company. Then after that Peter Lynch search the proxy statement of the company and they got the result is that the stock and stock option of the company is about $100 million. (One Up On Wall Street)
And this company’s P/E ratio is high. So if the author wants to increase his income double, then the executives of the company’s net worth also become $200 million.
So becoming this is unrealistic, so peter lynch never buys that stock, and sometime after the stock is going down.
If you think some executives do not become that rich then most of the time you are right.

5. Visit stores, buy and or taste product:

You can visit the store and ask some questions like that.
Ask questions to users of products like, Why you buy this product? and how much time is gone by using this product? and also can you recommend this product to other people. (One Up On Wall Street)
If one or two people give a bad review of that product, then is this no big deal.
So author gives the Apple company example, is that The Apple company is failing in mid-time but this time also in Peter Lynch office order the 7 to 8 macintosh computer and his wife also order macintosh, but the author doesn’t realize this stock and they lose the Apple company. (One Up On Wall Street)
This company can become the turnaround company, and you know the price of Apple Company in today’s day.
And The author also found the Crysler company that also fail for some time but this company become a turnaround by a person name is Lee Iacocca.
Then Peter Lynch calls Lee Iacocca and asks about the plan of the company regarding this situation and they love the plan and they think the plan also is going to execute. then they buy the Crysler company and this company becomes the turnaround. (One Up On Wall Street)

Read more on the previous chapter

Read Annual Report:

Screw the initial colorful pages and come to the annual report, and ask this question about the annual report to you, they are as follows

Cash and marketable securities: you can see how much increase by comparing to the previous year. If increase then this is a good sign.
Long-term debt: In this year and compare with previous year debt. if this debt is minimum than the previous year, if yes then good sign.
(Cash + market securities) > Long term debt: If this is happening then is a good sign by comparing 10 years of the balance sheet.
NOSO: If the Number Of Share Outstanding is decreased then the company does the share buyback, so this is a good sign. That is not mean is that buying buyback any time. you can check for a previous year’s buyback to share.
Net cash per share= [ ( cash + market securities) – long term debt]/NOSO

By asking and seeing the above stuff you get more information about the company.

One Up On Wall Street: Chapter 4

December 8, 2020 by Laxman Sonale 3 Comments

Hello friends, in today’s article, we see chapter 4 of one up on wall street book. In chapter 4 we see the Passing the mirror test. In this test, you have to ask some questions, for your investment purpose. So let’s see step by step.

Passing the Mirror Test:-One Up On Wall Street: Chapter 4

So you are investing in a business that is going too high or bankrupt, and many businesses come and go in your portfolio. But only things remain that are you. The stock market is a type of vehicle of transfers money from one place to another. So be careful the value of money is always high. So for this purpose, let’s have to ask some questions to pass the test. This test the pure and not lie that telling you, yourself. So that why it’s called passing the mirror test. let’s check it out.

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Before investing, you have to ask the following questions:

Ask first is, do I own a house?
Second, ask, Do I need money in the near future?
Do you have personal qualities that will bring me success in stocks?
How much to invest?

So let’s discuss the above question. (One Up On Wall Street: Chapter 4)

Ans(Q.1): If you have the house then, you have the minimum capability to live for three years on that house. So if you want to make money in the stock market, you have to ask this question. If you don’t have a house, the first priority is the make the house and then manage your money, in the stock market. let’s discuss the question second.

Ans(Q.2): If you have a house, and you want money to invest. So let’s again ask to question this. If the answer is yes, then don’t invest money. So that money used for the near one year’s future of your family. after this you are qualified to the second stage of mirror test. (One Up On Wall Street: Chapter 4)

Ans(Q.3): If your answer is no to this question. Then don’t invest by yourself, hire someone else. If you want to invest money in yourself, then you have to learn three qualities.

1) You have the patient to increase your investment.

2) You also have disciplined quality, to manage your money.

3) And also third is you have to eager to learn. In the stock market, there is so much knowledge about the companies. so you have third quality. After these qualities, you are capable to invest in the stock market. As live longer as an investor. (One Up On Wall Street: Chapter 4)

Ans(Q.4): Answer this question, you have to consider is that how much money have is to ignore if you lose. That amount of money, you can invest in the stock market. Peter Lynch, say invest like, you don’t care about that money if they lose. With all the above questions you are ready for investment in the stock market. (One Up On Wall Street: Chapter 4)

After this, you have to face three emotional states, are as follows

Three emotional State:

Concern emotion: This emotion is developed when the stock market down. In that time, investors live in fear and take tension about their investment. This concern stops you to take action, of buying the stock at a bargain price. In this period of investment can go maximum return.
Complacency(Satisfaction): aftermarket down period is gone, the investor buys the stock at a high price. In that consider is that its stock goes high. But this time they have to concern. Because of This time market at the pick position. (One Up On Wall Street: Chapter 4)
Capitulation(Submission): This is emotion comes when an investor buys a stock at some price. Then suddenly the market goes down, at buying stock price. At this time investor sell all stock, and submit himself.

This is all about chapter 4 of one up on wall street book.

Previous Chapter: Click here

One Up On Wall Street: Chapter 3

December 7, 2020 by Laxman Sonale 2 Comments

In this article, we see chapter 3 of One Up On Wall Street book. This chapter is all about Is this Gambling or what?. So let’s understand step by step chapter 3.

Is This Gambling or What?:

So many people say about the stock market is gambling. But they telling on their different way. When the market is in a bullish position, they called Investment. And when the market is bearish then people called Gambling.

In 1927, if you want to invest 1000 dollars, you have so many ways. so let’s start with Fix deposits. When you are investing 1000 dollars that increase by 7.5%. (One Up On Wall Street: Chapter 3)

And if you invest that money in government bonds, it gives 13.5%. And if you invest that money in a corporate bond, it gives 17.2%. And if you invest that money in common stock, it gives 272%. In that so many stock market crash, depression comes and go and so many recession come and go. After this stuff common stock gives a return on investment is about 272 times in 7 years. so let’s understand. Why stocks are investments.

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Why stocks are an investment:-One Up On Wall Street: Chapter 3

In your lifetime, you need only 6 stocks out of 10 stocks to successful. so let’s understand the power of common stocks.

In stock, you are an owner in a prosperous and expanding business. so you get benefits and stock prices to increase hugely. But bonds can’t make money as compare to stock.
In bonds, you are no more than the nearest source of spare change. Bond is like to take spare and sometimes one more dollar.(One Up On Wall Street: Chapter 3)
So there is no big company that is impossible to fail. you can’t say there is one blue ship’s stock or good company is not fail. If this is not happening, and you buy good company stock at a good price. you lose the value of that investment. So in that time, people say the stock is the gambling position and when stock increases are people called investment.
The stock market is like a stud poker game. As you go long as cards suggest favorable odds of success. and then you hold.(One Up On Wall Street: Chapter 3)

So the stock market is Gambling or investment is all about the investor mindset. If you have the knowledge of investment and company analysis then you make a good investment in a bad stock price company.

This is all about chapter 3 of One Up On Wall Street book.

Previous Chapter: Click here

Read More: common Stocks and Uncommon Profits

One Up On Wall Street: Chapter 2

December 6, 2020 by Laxman Sonale 2 Comments

Hello friends, in today’s article we see chapter 2 of one up on Wall Street book. In chapter 2 you get what is the oxymorons. And Why Peter Lynch called as oxymorons to the professional investor. In chapter 2 of One Up On Wall Street book, Peter Lynch explains that not all are the professional investor are oxymorons. let’s see step by step.

The Wall Street Oxymorons:-One Up On Wall Street: Chapter 2

Oxymorons: The professional investor who is doing dull work and gets the average return. So this type of professional investor is Oxymorons. So many professionals are not Oxymorons. Those are as follows.

So let’s see that people are professional investors but not oxymorons.

John Templeton: The best thing about john Templeton is that When the stock market crash in 1972 in the USA. These guys invest in other countries like Canada, Japan. They take all money from the USA market and invest in other countries. Most of the investor is not doing well in other country so for that, they can’t invest in other countries. (One Up On Wall Street: Chapter 2)
Max Heine And Micheal: Max and Micheal both are students of Benjamin Graham, so they follow the value investing approach, when the stock market is down then they invest in the market. So it is the professional investor but against the Oxymorons, so that why they are not the Oxymorons.
John Neff: He is a good investor, and choose that company to become a good return for him. For this reason, is also called Champion of out of Favor Stock. So he is not the oxymorons.
Ken Heebner and Peter Deroeth: Both of this investor is not going to the business school. Ken Heebner has a law background, and they completed their graduation from Harvard law school. So suddenly they have a passion for Equity. and then they start investing in equity and make more money. This is also a type of investor who does not go to business school and it’s got the benefit of that. (One Up On Wall Street: Chapter 2)
George Soros: This is a type of investor, who has the world record of the hedge fund. he is not also an oxymoron. And not doing what other oxymorons do.
Warren Buffet: Warren buffet is also a student of Benjamin Graham. He still operates the biggest holding company in the world. that has a big stock price. Warren Buffet is one that type of investor who comes in the Top riches people as an investor. He is a world-famous investor, and also a humble investor.

So let’s talk about the professional investor, following are some point about the professionals.

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Constraints for professionals:

Professionals discover companies very late: In professionals portfolios have a big size company and they don’t have time to research so that they don’t discover a company early. Sometimes it takes 10 years to discover the company. (One Up On Wall Street: Chapter 2)
Most Professionals focus on a handful of Companies: Professional investors select the company. which has a big size, and minimum risk. So they only focus on a handful of companies.
Fear of getting fired: Professional investor has a pressure of getting fire. So they do the same things as all professional investors do.
Spend a lot of time explaining to bosses and clients: If any one of those professional investors makes an investment in unpopular companies, They have to explain to the boss and also the clients. so for that difficult, most of the investor is not doing the investment in unpopular companies.
Constraints for professionals and the opportunity for amateurs: So individual investors make anywhere investment, without constraints and do a good job as compared to the professionals.
Amateur investor: If you think like an amateur, most of the time, you have common sense with you. So amateur investors to good investment as compared to professional investors. (One Up On Wall Street: Chapter 2)
Peter thinks like an amateur as frequently as possible: So that reason, he has the world record of fund manager continue of 13 years. You get good company, when you think like an amateur, so that reason peter thinks like an amateur.