Tuesday, May 15, 2012

Book Review: Beating the Street

Beating the Street (1993) by Peter Lynch

This book can be considered the sequel to the author's 1989 book One Up On Wall Street, which I previously read and enjoyed. Similar to that book, this one is largely autobiographical. In the first half of the book he provides some general discussion of investing (with a sprinkling of "Peter's Principles" along the way) and a retrospective account of his time as a mutual fund manager at Fidelity. One of his most important points comes in Chapter 2 (entitled "The Weekend Worrier"), where he tells investors not to get scared out of stocks whenever they hear prognostications of economic doom and gloom from market commentators. If a major crisis does occur and the stock market tanks, then investors should ride it out while buying their favorite stocks that have been pulled down with the rest of the market. In the second half of the book he discusses how he went about selecting the 21 stocks that he recommended to the readers of Barron's magazine in early 1992. While it was nice to gain some insight into his thought process, I surprisingly did not find the discussion to be particularly interesting or useful to me, perhaps because it was too specific to extract many general points. The book concludes with "20 Golden Rules" that are quite good, but they are presented in a short list without any extended discussion, which was disappointing. I would have preferred a book organized around these rules rather than (or in addition to) the discussions of his stock picks.

Note: I read this book in April-May 2012.

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