As promised yesterday, here's Rule #1 reader Lee's second book review -- of "Beating the Street" by Peter Lynch.
... Another book worth your time is "Beating the Street" by Peter Lynch (Simon & Schuster, 1993, 300 pages). 
Lynch is a famous and successful mutual fund manager, so I was curious to see how his approach compared to Buffett and Rule #1.
I was surprised (and reassured) to find that even though Lynch spent his career in mutual funds, he pretty much supports Phil's position that individuals can and should pick their own stocks. He preaches the same approach of investing in things you know and understand, and buying companies when they're on sale.
One of the best reasons to read this book is to understand how the managers of large funds operate.
As Phil explains, these guys are the market. Because they are graded in the short term and have to keep most of their money in the market, they have to accept loses as part of the game. Lynch reinforces Phil's point that large investors have to get in and out over many weeks, and often have to spread their money over several companies.
Lynch's book is somewhat dated now, and Rule #1 is a much better "investing textbook". Still, I recommend it for a couple of reasons.
First, many of these ideas are timeless, and it helps to hear the same message from a different author in a slightly different way. For example (like Buffett), Lynch is happiest during bear markets because he can pick up bargains.
Also, the numerous examples of how Lynch evaluates an investment are valuable.
Finally, his 20 golden rules, such as "know what you own and why you own it" and "everyone has the brainpower to make money in stocks; not everyone has the stomach" are worth remembering.
-- Lee
- Here are some more investing quotes worth reading, and quotes from Peter Lynch in particular.
