Appendix G: One Up on Wall Street [Part 1]

Purpose: To demonstrate the environmental factors that are required for a successful investor to analyze and  select companies where the return is greater than the risk.

by Peter Lynch with John Rothchild

Questions from Reading Selected Chapters

(Each student will be prepared to discuss the answers to each of the following questions in class.)

 

Introduction to the Millennium Edition

 

1.      Complete the following: “Never invest in any company before you’ve done the homework on the company’s _____ ______, ________ ________, ________ _______, ____ _ ______ and so forth.”

 

2.      Complete the following: “If you own a retail company, another key factor in the analysis is figuring out whether the company is _______ __ ___ of its ________ ____.”

 

3.      To be a winning in the stock market what percent of your picks need to be winners?

 

4.      Complete the following: “To help their shareholders avoid this double taxation, companies have abandoned the _______ in favor of the _________ strategy.”

 

5.      Complete the following: “It would be wonderful if we could ____ __ ______ with timely exits, but nobody has figured out how to ______ ___. Moreover, if you ____ stocks and ___ _ ______, how can you be certain you’ll ___ ____ ____ ____ for the ____ _____?”

 

6.      Why can’t Europe respond to unemployment setbacks?

 

Introduction: The Advantages of Dumb Money

 

1.      Complete the following: “Stop _____ __ ________.”

 

2.      Complete the following: “Dumb money is only _____ when it listens to the ______ ______.”

 

3.      What are the three good reasons to ignore what Peter Lynch is buying?

 

4.      What is a Tenbagger?

 

5.      Complete the following: “I stumbled onto big winners in ________ ____, the same way you could.”

 

6.      Complete the following: “Carolyn didn’t need to be a textile analyst to realized that _____ __ _ __________ ______.”

 

7.      Summarize what was learned from the L’eggs experience.

 

8.      Complete the following: “________ _____ and _______ _______ is one of the critical elements of the analyst’s job.”

 

9.      Complete the following: “People seem more comfortable investing in something about which they are entirely ________.”

 

10.  Complete the following: “if you couldn’t tell if that was a _______ or a ______ ____ you should stay away from it.”

 

11.  If the first step is finding a promising company, what is the next step?

 

12.  Lynch attributes his success at Magellan to what kind of stocks?

 

Chapter 1: The Making of a Stockpicker

 

1.      Complete the following: “Ultimately it is not the ______ _______  nor even the __________ themselves that determine an investor’s fate. It is the __________.”

 

2.      What is the Lynch Law?

 

3.      What is the Peter Principle?

 

4.      Complete the following: “it’s difficult to predict _________, but also that small investors tend to be ___________ and ___________ precisely the wrong times, so it’s _____-_________ to try to invest in good markets and get out of bad ones.”

 

5.      Complete the following: “In helping D. George Sullivan find his _______, I was helping myself find a _______.”

 

6.      Complete the following: “…studying ________ and _________ was much better preparation for the ________ __________ than, say, studying statistics. Investing in stocks is an ____, not a _________, and people who’ve been trained to rigidly ________ __________ have a big disadvantage.”

 

7.      Complete the following: “A lot of investors sit around and debate whether a stock is going up, as if the _______ _____ will give them the answer, instead of ________ __ ________.”

 

8.      What is the famous Newton quote Lynch states? How does this apply to this book?

 

9.      Complete the following: “My distrust of _______ and _____________ continues to this present day.”

 

10.  Complete the following: “The open-minded Ned Johnson watched me _____ __ _____ and _______ me on.”

 

Chapter 2: The Wall Street Oxymorons

 

1.      Complete the following: “it’s increasingly likely that you’re competing against ________ whenever you buy or sell shares. This is a lucky break for you.”

 

2.      Complete the following: “There are simply too many __________ between them [professionals] and the ___________.”

 

3.      What is “Street Lag?”

 

4.      Why do the fund managers avoid exciting stocks?

 

5.      Complete the following: “The _________ the client, the more _______ the portfolio manager has to do to please him.”

 

6.      Complete the following: “It’s exactly the kind of _________, __________, and ________ __________ company with an inscrutable name that I like to own.”

 

7.      What does Lynch mean by “burying the evidence?”

 

8.      Complete the following: “…the stock market demands __________ as surely as it ____________ the unconvinced.”

 

Chapter 3: Is This Gambling, or What?

 

1.      Was it a good deal for the Indians to sell Manhattan Island?

 

2.      Why are long-term T-bonds a good deal?

 

3.      Rank the performance of the following: Common stocks; Government bonds; Corporate bonds; and Treasury bills.”

 

4.      Why are common stocks a good investment?

 

5.      Complete the following: “The point is that __________ change, there’s no assurance that ______ _________ won’t become minor, and there’s no such thing as a can’t miss ______ _____.”

 

6.      Complete the following: “Historically, stocks are embraced as ________ or dismissed as _________ in routine and circular fashion, and usually at the _______ times.”

 

7.      Complete the following: “…we can begin to separate gambling from investing not by the type of activity but by the ________, _________, and _________ of the participant.”

 

8.      What are three evidences that a company may be in a growth situation?

 

9.      Complete the following: “Clearly the stock market has been a ______ worth taking---as long as you know how to _______ ___ _____.”