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

by Peter Lynch

From Mr. Biegler I learned that hotel and motel customers routinely pay one one-thousandth of the value of a room for each night’s lodging. If the Plaza Hotel in New York is worth $400,000 a room, you’re probably going to pay $400 a night to stay there, and if the No-Tell Motel is built for $20,000 a room, then you’ll be paying $20 a night.

p/e ratio of any company that’s fairly priced will equal its growth rate.

It’s the kind of debt, as much as the actual amount, that separates the winners from the losers in a crisis. There’s bank debt and there’s funded debt. Bank debt (the worst kind, and the kind that GCA had) is due on demand.

There’s another unwritten rule here: The closer you get to a finished product, the less predictable the resale value.

Companies that own natural resources—such as land, timber, oil, or precious metals—carry those assets on their book at a fraction of the true value.