Book review: Beating The Street.

I wrote this review in the hope that you'll avoid the mistake I made.

I bought (and read) in reverse chronological order the first two books Mr. Peter Lynch wrote, "One Up On Wall Street" and "Beating The Street". I got "Beating The Street" before "One Up" because I have been misled by a favourable review of this book made by a well-known financial internet site (maybe they make money out of every book they help to sell?).

Imagine you have written an excellent book and you have sold one million copies of it. What would you do after that? Would your publisher push you to write another one? Wouldn't you write again to try and repeat the success?
I think this is what happened to Mr. Lynch. He wrote "One Up On Wall Street", which is an excellent book indeed (I published a few weeks ago a review of this book, where I explain why I warmly recommend it) and he sold over one million copies of it.
"Beating The Street" is, I presume, an attempt to profit from the success of the first book.
Problem is, "One Up" is a masterpiece: it explains very well Mr. Lynch's proven investing philosophy and methods. If so, what else to publish in a later book?

While "One Up" is a book that explains and recommends strategies, i.e. tells how to successfully pick winning stocks, "Beating The Street" is actually a book that picks stocks for you.
Remember, this book has been published in 1993. I believe it is easy to understand that, after so many years, the then cheaply valued companies recommended by Mr. Lynch may be fairly valued, overvalued, no longer in business, or taken private by now.

In my opinion, "Beating The Street" is now a poor and completely out of date book. Here's an excerpt (from page 206 - ISBN 0-671-89163-4):
"I talked to Glacier (Bancorp) the day after Christmas. I'd come into my office in Boston wearing plaid pants and a sweatshirt. The building was empty except for me and the security guard.
(...) whoever answered the phone at Glacier Bancorp in Kalispell told me they were having a retirement party for one of the officers, but they'd inform chairman Charles Mercord that I called. They must have dragged him out of the party, because a few minutes later Mercord called me back.
Asking a president or a CEO about a company's earnings is a ticklish proposition. You're not going to get anywhere by blurting out, 'What are you going to earn next year?' First you have to establish rapport. We chatted about the mountains.(...)
My only worry was that Glacier may have overpaid for its acquisition, a topic I approached obliquely. 'I assume you had to pay over book value for this,' I said, inviting Glacier's president to admit the worst. But no, Glacier hadn't overpaid.
(...) I never hang up on a source without asking: what other companies do you most admire? (...) I've found many good stocks this way."

Well, apart that the well-known SEC-enforced "Regulation Full Disclosure" (Reg FD - not existent at the time Mr. Lynch wrote his book) now forbids analysts to talk privately about business matters with companies' officials, I'm not sure any of you would be able to pick up the telephone and have a nice conversation the day after Christmas with any CEOs, wouldn't you?
I estimated that, if every buyer of those one million copies "One Up" sold were to call Glacier Bancorp, the CEO would have to spend over nine years talking to the telephone (one million 5-minutes calls, 24 hours a day, 7 days a week, 52 weeks a year...).

Save your money and get "One Up On Wall Street" instead.

Giancarlo Nicoli