One Up On Wall Street: How To Use What You Already Know To Make Money In

by Peter Lynch

Dumb money is only dumb when it listens to the smart money.

People seem more comfortable investing in something about which they are entirely ignorant.

Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out by just sitting there, instead of checking the horse.

“Stocks you trade, it’s wives you’re stuck with,”

There are five basic ways a company can increase earnings*: reduce costs; raise prices; expand into new markets; sell more of its product in the old markets; or revitalize, close, or otherwise dispose of a losing operation.

If there’s enough cash—see line 2—to cover short-term debt, then you don’t have to worry about short-term debt.)

There’s another unwritten rule here: The closer you get to a finished product, the less predictable the resale value. You know how much cotton is worth, but who can be sure about an orange cotton shirt?