Of Lynch and the above 95s club - Part 1
It's really been a while since I last posted.
One of things that I have learned about myself during this Great Recession stock market downturn is that I am better at not getting excited during rallies rather than buying during downturns. My buying record and patience could have been better throughout 2007 to 2009.
Anyways, the simple trick I use is simply that I read while markets experience upturns. I find that it distracts me from the euphoria and keeps my mind occupied on good stuff.
I have been doing lots of reading lately since the upturn in the market on March 2009. I have been going through Tom Gardner's reading list and try to gobble up as many books as time would allow.
- Beating the Street by Peter Lynch
- Valuegrowth Investing by Glen Arnold
In process (yes, I read several at the time)
- Pocket Vest book to Investing by Thomas Howard
- Snowball by Warren Buffett
- Investment Fables by Aswath Damodaran
- Common stocks, Uncommon Profits by Philip Fisher
- Forbes Greatest Investment Stories
These are quite diverse books with different perspectives and written by writers of different values. Value Growth investing started off rather uninspiringly for the first part which was essentially summaries of different value investing approaches but got much better during the end - the well thought out summaries of industry dynamics and business competition are worth the time.
Lynch's Beating the Street was a less breezy read than his One Up on Wall Street, however, gave a good feel of the thought process and how Lynch produced a incredible 30% per year performance over more than 10 years. In real life, not just nice concepts. What was eye opening for me was that Lynch's biggest winners included companies like Fannie Mae, Chrsyler and Ford. All companies in a fair bit of trouble now - it also gave me new perspectives on broad-based investing which I will share in Part 2. I happen to think that TMF1000 style of analysis and figuring out how business works has hallmarks of the Lynchian higher-level and broad approach.
I also must admit that I was initially less interested in Damodaran's academic like approach to the topic of investment but concluded that his emotionless look at data over the years as opposed to clever framing of data had its benefits to consider. I think it would be an interesting data driven read.
Snowball represents leisurely reading. It's written with a style which has a warmth about it.Who wold have thought that Warren was a real deliquent in school! Always the less flattering version, I suppose.
Until next time ...