If a company—especially a retailer or a manufacturer—has a large inventory, it usually means it isn’t selling as much as it would like to, contends Lynch. Further, this inventory will depreciate in value and can’t be sold for as much in the future—think about clothing, which rapidly depreciates because it goes out of style. Consider avoiding such companies. When looking at the same sky, people in mature industries see clouds where people in immature industries see pie.” Pension plans: these are obligations the companies agree to pay; therefore, they should be seen as debt. Pay attention specifically to it on turnarounds.

First, pay attention to the businesses you are surrounded by, as a consumer but as a professional as well. It’s better to invest in the industry you work in than in an industry that you don’t know anything about. You have to lever the knowledge that you already have. Some of the best gains of the decade (as has been the case in prior decades) came from old-fashioned retailing. The Gap, Best Buy, Staples, Dollar General -- these were all megabaggers and well-managed companies that millions of shoppers experienced firsthand. That two small banks appear on this list shows once again that big winners can come from any industry -- even a stodgy slow-growth industry like banking. My advice for the next decade: Keep on the lookout for tomorrow's big baggers. You're likely to find one. Growth rate: the only growth that matters is growth in earnings. If the business can increase prices year after year without losing customers, we have a tremendous investment. A company growing at 20% selling at a P/E of 20 is a much better investment than a company selling at a P/E of 10 growing at 10%.

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On top of that he provides real decisions that he has made during his career as director of Magellan Fidelity investment fund. Don't get faked out by macro events such as M1-money supply, oil prices, dollar index, etc. Lynch pays no attention to external economic conditions, except in the few obvious instances when he's sure that a specific business will be affected in a specific way. I finally read 2 of the best investment books in the same period including “The Intelligent Investor by Benjamin Graham”. Next, look for the company’s ways of diversification. Maybe the company is buying shares in non-related businesses from diverse industries. That could be a potential sign of a bad investment. Next, be aware of their customer base. If the company is dependent on few customers, or on one single type, things can go really bad if they leave. So you wouldn’t want to be there when that happens, right? of 5 stars 2 of 5 stars 3 of 5 stars 4 of 5 stars 5 of 5 stars One Up On Wall Street: How to Use What You Already Know to Make Money in the Market by Peter Lynch

Full Book Name: One Up On Wall Street: How to Use What You Already Know to Make Money in the Market inventory เพิ่ม 30% มันอาจหมายความว่า ในปีต่อๆไป ของใหม่ที่ผลิตออกมาจะแข่งขันกับของเก่าและสต๊อกก็จะเพิ่มมากขึ้นไปอีกจนมันถูกบังคับให้ต้องลดราคา และแปลว่ากำไรจะน้อยลงOne Up on Wall Street has the potential to radically improve your finances, if you turn the knowledge into practice. This time-proven book can help any individual or institution spot valuable investment opportunities. Peter Lynch is not only one of the best investors of the twentieth century but also an excellent writer. You could do worse than get an education from him in just a few hours. Who would I recommend the One Up on Wall Street summary to? Still, there’s reason to be cautious when a company pays no dividends: They might not be investing their profits in growth, but rather in poorly conceived projects or acquisitions. View dividends merely as a piece of the research puzzle, and don’t invest simply because a company does or doesn’t pay dividends. When I'm interested in a company because of a particular product, the first thing I want to know is what the product means to the company in question. What percent of sales does it represent? Pampers was more profitable than L'eggs, but it didn't mean as much to the huge P&G. Lynch provides the example of the couple that spends the weekend looking for the cheapest airfare to fly to London but does not pay thought at all when investing a large part of their savings in KLM shares. In liabilities, see the amount of long-term debt and see if it is increasing or decreasing (if cash has been growing and this type of debt is decreasing, then the balance is getting stronger and stronger); then view the total and calculate the net cash position.