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Module Units
- 1. Introduction
- 2. The Advantages Of Dumb Money
- 3. The Making Of A Stock Picker
- 4. The Wall Street Oxymorons
- 5. Is This Gambling, Or What?
- 6. Passing The Mirror Test
- 7. Is This A Good Market? Please Don’t Ask.
- 8. Key Learnings From Section 1
- 9. Stalking The Ten-Bagger
- 10. I’ve Got It, I’ve Got It—What Is It?
- 11. The Perfect Stock, What A Deal!
- 12. Stocks I’d Avoid
- 13. Earnings, Earnings, Earnings
- 14. The Two-Minute Drill
- 15. Getting The Facts
- 16. Some Famous Numbers
- 17. Rechecking The Story
- 18. The Final Checklist
- 19. Key Learnings From Section 2
- 20. Designing A Portfolio
- 21. The Best Time To Buy And Sell
- 22. The 12 Silliest & Most Dangerous Things People Say About Stock Prices
- 23. Options, Future, And Shorts
- 24. Key Learnings From Section 3
Options, Future, And Shorts
Lynch writes in the 19th chapter of his book that unless one is a professional in trading it is nearly impossible for them to win bets.
He says that derivatives are leveraged products. It's great when used to hedge but extremely risky if used as a speculative tool.
“In the multibillion-dollar futures and options market, not even a small percentage of money is put into constructive use. It doesn't finance anything, except the cars, planes and houses purchased by the brokers and the handful of winners. What we are witnessing here is a giant transfer payment from the unwary to the wary.”
Lynch tells his investors that they can't spend the proceeds from shoring stocks at other places unless they have paid the shares back to owners.
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