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

by Peter Lynch

Stock prices often move in opposite directions from the fundamentals but long term, the direction and sustainability of profits will prevail. • Just because a company is doing poorly doesn’t mean it can’t do worse. • Just because the price goes up doesn’t mean you’re right. • Just because the price goes down doesn’t mean you’re wrong. • Stalwarts with heavy institutional ownership and lots of Wall Street coverage that have outperformed the market and are overpriced are due for a rest or a decline. • Buying a company with mediocre prospects just because the stock is cheap is a losing technique. • Selling an outstanding fast grower because its stock seems slightly overpriced is a losing technique. • Companies don’t grow for no reason, nor do fast growers stay that way forever. • You don’t lose anything by not owning a successful stock, even if it’s a tenbagger. • A stock does not know that you own it. • Don’t become so attached to a winner that complacency sets in and you stop monitoring the story. • If a stock goes to zero, you lose just as much money whether you bought it at $50, $25, $5, or $2—everything you invested. • By careful pruning and rotation based on fundamentals, you can improve your results. When stocks are