Book Reivews: "Beating the Street" by Peter Lynch

'Beating the Street', by Peter Lynch is an investment book considered to be among the should read list for investors. 'Beating the Street' was published after 'One Up on Wall Street', an investment book considered a must read by a number of investors. Both 'Beating the Street' and 'One up on Wall Street' are written by one of the most successful American mutual fund managers, Peter Lynch. The book was originally published in 1993 by Simon & Schuster Inc., is 318 pages with index, and its writing was assisted by John Rothchild, a heralded financial writer.

In 'Beating the Street's' 21 Chapters, Peter Lynch tells an enthralling story of his stock picking days for the Fidelity Magellan Fund, a multi billion dollar mutual fund. Lynch starts out explaining why he left Fidelity and then why stocks are a better investment than bonds before going into detail about how he invested, why he invested in the stocks he did, how to invest in mutual funds and why investors should invest in stocks and mutual funds. Although some of the ideas presented in the book are now outdated and out of sequence with investment cycles and patterns, it still contains a decent amount of quality financial information.

Throughout the book, Lynch provides a number of useful and interesting tips, insights and techniques. Lynch combines his historical decision making with anecdotal and not so anecdotal investing principles, many examples of corporations he invested in and their profiles, and 20 golden rules of investing at the end of the book. In other words, 'Beat the Street', by Peter Lynch provides a chronology of experiences and decisions with a quality of commentary one would expect from wise, and successful retired fund manager.

Of the corporate investments described by Peter Lynch in 'Beating the Street', Lynch explains how he came to choose those companies, why and often when. This gives the reader a detailed map of investment thinking and how financial reasoning works. For example, in Chapter 18, 'My Fannie Mae Diary', an interesting chain of financial events gives way to what they meant in terms of investing, and how they were acted upon by Lynch. The accounts of Lynch's buy, sell or hold decision(s) for each company are each unique to the company, their operational and financial situations and the circumstances surrounding such.

Apart from the useful information in 'Beating the Street', the book is well written, clear, to the point and detailed with examples, technical charts and illustrations. Reading 'Beating the Street' is not an exercise in advanced quantitative finance, it's a lesson in how to invest with what you know and basic investment principles. The book is not filled with excessive padding, tangential or irrelevant information. Rather, the historical account underpinning the books advice provides a meaningful backdrop that is both useful and an essential ingredient in understanding Lynch's financial reasoning. For the small price one might pay for this book used, the benefits in terms of knowledge are quite good.