Beating the Street

Develop a Winning Investment Strategy—with Expert Advice from “The Nation's #1 Money Manager”
*

Peter Lynch's “invest in what you know” strategy has made him a household name with investors both big and small.

An important key to investing, Lynch says, is to remember that stocks are not lottery tickets. There's a company behind every stock and a reason companies—and their stocks—perform the way they do. In this book, newly revised and updated for the paperback edition, Peter Lynch shows you how you can become an expert in a company and how you can build a profitable investment portfolio, based on your own experience and insights and on straightforward do-it-your-self research. There's no reason the individual investor can't match wits with the experts, and this book will show you how.

In
Beating the Street
, Lynch for the first time:

• Explains how to devise a mutual fund strategy

• Shows how he goes about picking stocks, step-by-step

• Describes how the individual investor can improve his or her investment performance to rival that of the experts of the investment clubs.

During
P
ETER
L
YNCH'S
thirteen successful years as manager of the Fidelity Magellan Fund, it was the top-ranked general equity mutual fund in the nation. One thousand dollars invested in Magellan in 1977 was worth $28,000 when he handed over the reins of magellan on May 21, 1990.

Since his retirement from the Magellan Fund. Lynch continues as a member of the board of trustees of the Fidelity Group of funds and writes a column for
Worth
magazine. He lives with his wife. Carolyn, and three daughters in the suburbs of Boston and is the author of the investment classic,
One Up on Wall Street
.

J
OHN
R
OTHCHILD
is the coauthor of
One Up on Wall Street
. He is the author of several highly acclaimed books on business and finance, among them.
A Fool and His Money and Going for Broke
. He lives in Miami Beach.

MEET THE AUTHORS, WATCH VIDEOS AND MORE AT
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COVER DESIGN BY BARRY LITTMANN • COVER PHOTOGRAPH BY SIGRID ESTRADA

 

A
LSO BY
P
ETER
L
YNCH

Learn to Earn

One Up on Wall Street

(with John Rothchild)

SIMON & SCHUSTER PAPERBACKS

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New York, New York 10020

www.SimonandSchuster.com

Copyright © 1993, 1994 by Peter Lynch

All rights reserved, including the right to reproduce this book or portions thereof in any form whatsoever.

S
IMON
& S
CHUSTER
P
APERBACKS
and colophon are registered trademarks of Simon & Schuster, Inc.

Designed by Irving Perkins Associates

Library of Congress Catalog Card Number: 94227861

ISBN-13: 978-0-671-75915-5

ISBN-10: 0-671-75915-9

ISBN-13: 978-0-671-89163-3 (Pbk)

ISBN-10: 0-671-89163-4 (Pbk)

ISBN-13: 978-1-4516-8706-4 (eBook)

To John Rothchild for his amazing talent, hard work, and good humor, which enabled
One Up on Wall Street
and
Beating the Street
to occur.

To Peggy Malaspina, who challenged every assumption and played a crucial role in shaping the ideas in both of these books; and to her research staff, who worked overtime assembling data and checking facts: Davida Sherman and Andrew Wolf, backed up by Michael Graber, Christine Coyne, Lyn Hadden, and Erik Masci.

To employees at Fidelity, particularly my associate Evelyn Flynn, but also Bob Hill and the staff of the Fidelity Chart Room, Guy Cerundolo, Bob Beckwitt, Lauren Allansmith, Phil Thayer, and Jacques Perold.

For searching out the facts, no one beats the dedicated staff of Fidelity's Fixed Income and Equity Research Information Centers, especially Shawn Bastien, Karen O'Toole, and Sheila Collins. Jeff Todd and Christopher Green in the Management Information and Analysis Group provided many of the charts and performance calculations.

Also thanks to editor Bob Bender, his assistant Johanna Li, copy supervisor Gypsy da Silva, and copy editor Steve Messina at Simon & Schuster.

This book would not have happened without the efforts of Doe Coover, a Boston literary agent who marshaled the proposal through its various stages.

John Rothchild thanks his agent, Elizabeth Darhansoff. He was assisted in Miami by Bruce Lemle, who plays a mean game of duplicate bridge.

To my wife, Carolyn, and our daughters, Mary, Annie, and Beth. To my brothers, Eugene Lynch and Thomas Lynch, and my cousin Thomas Leahy.

Thank you for purchasing this Simon & Schuster eBook.

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P
REFACE

P
REFACE TO THE
T
RADE
P
APERBACK
E
DITION

INTRODUCTION
: E
SCAPE FROM
B
ONDAGE

ONE:
T
HE
M
IRACLE OF
S
T
. A
GNES

TWO
: T
HE
W
EEKEND
W
ORRIER

THREE
: A T
OUR OF THE
F
UND
H
OUSE

FOUR
: M
ANAGING
M
AGELLAN
: T
HE
E
ARLY
Y
EARS