Finally doing part two of the stock market investing from Peter Lynch’s book, One up on Wall Street. I am very excited as it is about where to find stocks to buy, what stocks to buy, how to buy, when to sell stocks and when to buy special stocks. The stock market is not a gambling place, it is a place for investing in great businesses through stocks. In this video, we discuss where to first look for great stocks to buy, tomorrow we will look how to categorize those ideas.
Peter Lynch’s book reveals where to find great stocks to BUY!
Q4 2019 hedge fund letters, conferences and more
Good day fellow investors. I'm really, really excited to start summarising the second part of Peter Lynch's book, One Up On Wall Street because this book talks about how to get how to spot those great investments of those 10 1500 baggers. What are the categories of stocks, how to categorise possible investment and we're going to systematically detail discuss that and put it into a contemporary perspective. So please subscribe and click that notification bell for contemporary Peter Lynch, Warren Buffett, Charlie Munger investing.
I'll start with a short introduction into the second chapter chapter which is about how to spot this those 10, 20, 50, 100-baggers and Peter Lynch discusses it that you have to spot them you find those companies, when you simply look around yourself, okay, what is the business, what's going on? And I remember like it was today, in 2009 I had to buy a special book and then I went online searching it. And then I found it in Italian on Amazon, Italy. Okay, I bought the book it came to another country was shipped, everything was right. But I didn't go and check for the stock. I was happy with other investments that I had at the time I did also very well. But if I check Amazon stock price, it's up 20 times since then.
So if I just had looked around me, okay, I mean, I was using the service, I was using the product. And there you have already a 20 bagger in what, 10-11 years. That's something amazing. So you have to look at what's around you, and then apply the following tools. So we're going to discuss how to exploit your edge. Where are you? What's your industry? What are you living in? How to find the most promising investors? How to evaluate what you own?
We look at fundamentals. Then we are going to categorise all the stocks in the second video, which I'll make tomorrow, because in at the end of this video, I'll give you something to do so something to start thinking about and then tomorrow will categorise the stocks that you mentioned in the comments below. And then third part, third video will be about stock market research and then fundamentals and at the end of this summary chapter, you'll have a good idea how you find the stock, and then how to decide whether it's something to buy or to sell. That is what this book does. So it's an amazing book. There's also a link in the description below for the book if you wish to buy it. I think every investor should have this book on his shelf.
It's very funny. You can find the many examples of great investments in books. This book was written at the end of the 1980s and Peter Lynch mentions ADP, so Automatic Data Processing and it's a company processes, paychecks and whatever.
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Peter Lynch's book on 10 baggers
And he says that those that invested in 1960 something, we're looking at the 400 bagger, because there were a lot of people using the company in those that invested in 1989, while finding it in this book as a great business still made a lot of money on it. If we look at the chart, it was 4.5 dollars in 1989. Now it's 172. So it went up 40 times. That's an amazing investing, not including even the ever growing dividends.
So an investor that bought Lynch's book in 1987-89, which was a best seller by the time so a lot of people read it could found a great business in the book itself. So we have to look for great businesses around us understand them, and therefore the exercise for you is okay, right down in the comments below free businesses that, not the Teslas or the hot things, free businesses that you see okay, this is a good business, it's doing good. I'm using the products or someone around me is using the product is really growing. It's strong. It has a good brand it has a moat, it has this, write them down.
Don't give me the hot stuff. Give me the stuff that oh, now I know this. Now I know this check whether there is a stock or whether there isn't a stock doesn't matter. Just name the business and put them in the comments below. That's the exercise and then tomorrow in the video will categorise those businesses in the six categories Lynch talks about. From growth stocks from cyclical stocks from turnarounds and asset place. So I'm looking forward to your comments. It's your turn now. Thank you, and I'll see you tomorrow in the next video.