Beating the Street

I'm new to investing and started by reading "The New Buffettology" (Clark, M. Buffett) and most recently Peter Lynch's 1993 "Beating the Street." I was enamored with Lynch's very candid perspective of his career. What I learned in a nutshell summary is this:

(1) Like sports betting, for every financial analyst saying "buy," another is saying "sell." Picking stocks can be a coin flip with the bets evening out on both sides...the surest winners are those charging broker fees.

(2) Great analysts are separated by special knowledge into a company/sector. Some of Lynch's biggest scores were from talking with a CEO over dinner and discovering something great about that CEO's competitor. Since Ellen Kullman won't be inviting me to dinner any time soon, I'll need another avenue.

(3) Absent special knowledge of a sector, we're all largely speculating on the same set of data (balance sheets, earnings history, cyclical trends etc.).

(4) Warren Buffett's principles are the most sound fundamentals to abide by for analysts who can't dine with Meg Whitman.

I'm a huge fan of Peter Lynch now. Reading his book was like listening to his career war stories over a late evening beer. Yet even Lynch admits quite candidly that he failed to beat the market during some critical upswings in the economy. So if even Peter Lynch can hit and miss, what chance does the novice investor have?

I guess I could take away the following bullet points to guide me: (1) Warren Buffett is pretty crafty. Invest in companies showing sound fundamentals and a positive, sustained earnings trend if you want to make it over the long haul (2) seek companies with powerful competitive advantages when possible (3) understand what it is you're investing in and (4) always check EDGAR...it's the closest I'll ever get to that CEO dinner table. --Schlitz