LEARN TO EARN

A beginner's guide to the basics of investing and business

by PETER LYNCH with John Rothchild

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Used softcover book in very good condition, 272 pages, published 1995. Name inside front cover, no marks, writing, tears, loose or missing pages.

Many investors, including some with substantial portfolios, have only the sketchiest idea of how the stock market works. The reason, say Peter Lynch and John Rothchild, is that the basics of investing - the fundamentals of our economic system and what they have to do with the market - aren't taught in school. At a time when individuals have to make important decisions about saving for their future, this failure to provide a basic education in investing can have tragic consequences.

For those who don't know what to look for, investment opportunities are everywhere. The average high-school student is familiar with Nike, Reebok, McDonalds, The Gap and the Body Shop. Nearly every teenager in the Western world drinks Coke or Pepsi, but only a very few own shares in either company or even understand how to buy shares.

In Learn to Earn, Lynch and Rothchild explain how to read a stock table in the daily newspaper, how to understand a company annual report and why everyone should pay attetion to the sharemarket. They explain not only how to invest, but also how to think like an investor.

About the author

Peter Lynch (born January 19, 1944) is a Wall Street stock investor. He is currently a research consultant at Fidelity Investments. Lynch graduated from Boston College in 1965 and earned a Master of Business Administration from the Wharton School of the University of Pennsylvania in 1968. Lynch was hired as an intern with Fidelity Investments in 1966. He initially covered the paper, chemical, and publishing industries, and when he returned after a two-year Army stint he was hired permanently in 1969. This time Lynch was charged with following the textiles, metals, mining, and chemicals industries, eventually becoming Fidelity's director of research from 1974 to 1977. In 1977, Lynch was named head of the then obscure Magellan Fund which had million in assets. By the time Lynch resigned as a fund manager in 1990, the fund had grown to more than billion in assets with more than 1,000 individual stock positions. From 1977 until 1990, the Magellan fund averaged a 29.2% return and was one of the best-performing funds in the world.

Lynch coined some of the best known mantras of modern individual investing strategies. His most famous investment principle is simply, "Invest in what you know," popularizing the economic concept of "local knowledge". This simple principle resonates well with average non-professional investors who don't have time to learn complicated quantitative stock measures or read lengthy financial reports. Since most people tend to become expert in certain fields, applying this basic "invest in what you know" principle helps individual investors find good undervalued stocks.

Lynch uses this principle as a starting point for investors. He has also often said that the individual investor is more capable of making money from stocks than a fund manager, because they are able to spot good investments in their day-to-day lives before Wall Street. Throughout his two classic investment primers, One Up on Wall Street and Learn to Earn, he has outlined many of the investments he found when not in his office - he found them when he was out with his family, driving around or making a purchase at the mall. Lynch believes the individual investor is able to do this, too. He also coined the phrase "ten bagger" in a financial context. This refers to an investment which is worth ten times its original purchase price and comes from baseball where "bags" or "bases" that a runner reaches are the measure of the success of a play. A "two bagger" would double its original purchase price.

Though he continues to work part-time as vice chairman of Fidelity Management & Research Co., the investment adviser arm of Fidelity Investments, spending most of his time mentoring young analysts, Peter Lynch focuses a great deal of time on philanthropy. He said he views philanthropy as a form of investment. He said he prefers to give money to support ideas that he thinks can spread, such as First Night, the New Year's Eve festival that began in Boston in 1976 and has inspired similar events in more than 200 other communities, and City Year, a community service program founded in Boston in 1988 that now operates in 14 locations.

John Rothchild is the bestselling author of the critically acclaimed A Fool And His Money and Going For Broke, among other books. He has also co-authored, with Peter Lynch, One Up On Wall Street, Beating The Street, and Learn To Earn. A Former Editor of Washington Monthly and financial columnist for Time magazine and Fortune, Mr Rothchild has also written articles for Harpers, Rolling Stone, Esquire, and many other periodicals. He has appeared on The Nightly Business Report, the Today Show, and CNBC.

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Learn to Earn by Peter Lynch with John Rothchild