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Investment Analysis Clubs / Value Hounds
|Subject: Re: Depth of DD||Date: 2/10/2013 8:39 PM|
|Author: WeekEndMartian||Number: 13479 of 19161|
To this day it's Peter Lynch I've been most successful in learning from.
Older posters know my theme so I apologize upfront, but the above could not be more true (by the way, you start with One Up On Wall Street which is theory while Beating is more application - read One Up FIRST - it is the more important of the two books, though for an industry primer you will find no better source than Beating).
In fact, at the risk of sounding patronizing and insulting, I don't understand (MOST) people who try to develop an investment approach do so on their own. This is not only nuts - it is not time efficient, it is crazy, and my guess is few are successful. What most mere mortals should do is 1) indentify a style that works, 2) make sure it works for you, and 3) copy, copy, copy.
What makes Lynch a uniquely qualified model to copy is pretty simple. Here:
1 - He ran a mutual fund with a fantastic long term record. Thus, his is vastly experienced and successful in a very large organization and ran gazilliions of dollars.
2 - He was HEAD OF RESEARCH for 3 years. Let's repeat that in all caps again - HE WAS HEAD OF RESEARCH FOR THREE YEARS.
3 - His books are written in plain english. This is remarkable achievment.
4 - Lastly, his books and articles are laced with checklists. Even bad investors can benefit from a simple route follow-up with a simple checklist.
No, Lynch won't make you a successful investor, but he can give you the approach, foundation, and tools.
A word of caution - you have to actually read the books. Second, you have to READ to APPLY. This is entirely different than most people's experience with a simple read.
If you do this, you cannot help but become a better investor. Not necessarily a 'good' investor but a better one than you were before.
His researching to story is deep but his researching the financials is rather shallow compared to what others do.
ccs, no offense, but this isn't factually right. One Up and Beating were written for a general audience, not professional analysts. That said, that doesn't mean Lynch couldn't command a complete expertise of the numbers at hand. You always have to remember who Lynch was - he was head of Magellan, the largest fund on the planet. He could command enormous reasources and certainly wouln't shy away from complex financials (his whole series on S&Ls in Beating and Worth magazine proved that, and I can give you many other examples), though clearly he really really liked the simple story.
Course, I am incredibly biased. I have based on my entire investment career on those two books and have read them more times than I can count and have them sitting at my side at all times when I am working.
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