Appendix H: One Up on Wall Street [Part 2]

Purpose: To show students how to investigate companies that show promise and what attributes they must demonstrate to be successful.

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.)

 

Chapter 4: Passing the Mirror Test

 

1.      Before anyone buys a stock they should address what three issues?

 

2.      Complete the following: “It is no accident that people who are _______ in their houses are ________ in their stocks.”

 

3.      Complete the following: “’Never invest in anything that eats or needs repairs’ may apply to _________, but its’ malarkey when it comes to ________.”

 

4.      Complete the following: “Only invest what you could afford to lose without that loss having any effect on you daily ______ ____ in the foreseeable future.”

 

5.      What are the twelve qualities a stock investor should have?

 

6.      How important in complete information?

 

7.      Complete the following: “…by the time the ______ is received, the message may already have _______.”

 

8.      The unwary investor passes through what three emotional states?

 

9.      Complete the following: “The true______ waits for things to cool down and buys stocks that nobody cares about, and especially those that make _____ _____ ______.”

 

Chapter 5: Is This a Good Market? Please Don’t Ask

 

1.      Complete the following: “You don’t have to be able to ______ __ _____ ______ to make money in stocks.”

 

2.      Ed Hyman looks at what three indicators or economic movement?

 

3.      Explain the Cocktail Theory.

 

4.      Complete the following: “I don’t believe in predicting the market. I believe in buying great companies---especially companies that are _______ and/or _____________.”

 

Chapter 6: Stalking the Tenbagger

 

1.      Where are the three best places to look for a tenbagger?

 

2.      How often does the average person come across a likely prospect in a year?

 

3.      Complete the following: “So often we struggle to pick a _______ ____, when all the while a _______ ____ has been struggling to pick us.”

 

4.      What does Lynch mean by ‘an edge?”

 

5.      Complete the following: “Buyers and sellers of _____ _______ notice shortages and gluts, price changes and shifts in demand.”

 

6.      Grassroots observers can spot a turnaround how far in advance of the regular financial analyst?

 

7.      What is the consumer’s edge?

 

Chapter 7: I’ve Got It, I’ve Got It, What Is It? 

 

1.      Complete the following: “What you’ve got so far is simply __ _____ to a story that has to be developed.”

 

2.      How long does it take to develop the story?

 

3.      What is the Charmin syndrome?

 

4.      Complete the following: “What effect will the success of the product have on the _______ ___ __________.”

 

5.      How important is the size of the company?

 

6.      What five things did a company that does everything right do?

 

7.      What is the sure sign of a slow grower?

 

8.      A stalwart generates what annual percent growth in earnings?

 

9.      Fast growers are young companies that are overzealous and what else?

 

10.  What are the most misunderstood of all the types of stocks?

 

11.  What type of stocks result in unwary stock pickers being most easily parted from their money?

 

12.  Complete the following: “Turnaround stocks make up lost ground ___ _________.”

 

13.  Complete the following: “…of all the categories of stocks, their ups and downs are ____ ____ to the general market.”

 

14.  What are the five various types of “Turnarounds?”

 

15.  Define an “Asset Play” stock?

 

16.  What is the single biggest quality an investor needs once they have found an asset play?

 

17.  Complete the following: “Putting stocks in categories is the _______ ____ in developing the story.”

 

Chapter 8: The Perfect Stock, What a Deal!

 

1.      Does Lynch like simple situations?

 

2.      Generally, the perfect stock will be in a company that could be run by ___ _______.

 

3.      What does Lynch think of boring, dull or ridiculous?

 

4.      What kind of name should the company have?

 

5.      What about companies that do something disagreeable?

 

6.      What does Lynch think of Spin-offs?

 

7.      Is obscurity a factor in Lynch’s perfect stock scenario?

 

8.      What does the example of SCI suggest?

 

9.      Complete the following: “There’s no way to overstate the value of _________ __________ to a company or its shareholders.”

 

10.  Complete the following: “I always look for ________. The perfect company would have to have one.”

 

11.  Complete the following: “_______ ________ SUCH AS Robitussin or Tylenol, Coca-Cola or Marlboro, are almost as good as _______.”

 

12.  Complete the following: “Why take chances on fickle purchases when there’s so much _______ business around?”

 

13.  Complete the following: “…it’s more significant when __________ at the ________ echelons add to their positions.”

 

14.  Complete the following: “…there’s only one reason that _______ buy: They think the stock price is undervalued and will eventually ____ ____.”