One Up on Wall Street Exam Questions And
Answers (Guaranteed A+)
Intro - answer✔stocks are priced more accurately than the real estate market
-real estate is not an efficient market
-Peter Lynch, fundamental value investor
-own a house a soon as you can for the long term
-Lynch: don't pay attention to short-term volatility
-Don't buy stocks: buy companies. In other words, don't worry about the short term stock
changes, invest in the company's long term prospects
-invest in a house before the stock market
Part 1: The Advantages of Dumb Money - answer✔-dumb money is only dumb when it listens
to the stock market
Chapter 1: The Makings of a Stock Picker - answer✔Lynch ran the Fidelity Magellan fund for
decades and outperformed the market consistently
-How to use what you already know to make money in the market
-Lynch saw the excesses of the Dot.com boom and bust before it happened
-Criticizes the EMH
-believes the market is not all that efficient, consistent with Graham and Malkiel. Long-term
investor with a horizon of 3-10 years
Chapter 2: The Wall Street Oxymoron - answer✔Lynch believes that individual investors have
an advantage over big portfolio managers because they are not as constrained
-Not subject to as many rules and regulations that professional investors have to pay close
attention to:
ALL RIGHTS RESERVED.
-Approved list
-Size impact
-Wait for analyst coverage
Chapter 3: Is this Gambling or What? - answer✔-bonds and debt instruments when rates are
abnormally high
-stocks beat bonds over the long term
-6 out of 10 successes have a great track record in stock investing
Chapter 4: Passing the mirror test - answer✔1) do I own a house?
one of the best investments you can make
2) Do I need money?
Never put money at risk that you can't afford to lose
3) Do I have the personal qualities that will bring me success in stock investing?
Can't panic
Can't try to time the market
Chapter 5: Is This a Good Market? - answer✔Never ask that question
-invest for the long term, don't time the market
-current market level should be irrelevant
Key points - answer✔1. dont overrate the so called investment pros
2. use what you already know
3. Look where most others are not looking
4. invest in a house first
5. invest in companies, not stocks
6. ignore the short-term fluctuations
7. common stocks can produce both large profits and large losses
8. Don't try to predict the economies future
9. Don't try to predict the stock market in the short run
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