Lynch’s story is a good account of how a top performing mutual fund manager (better than 25% a year over 13 years) accomplishes a superior track record, but it's a poor how-to manual for the individual investor. Unfortunately, you will not have the access to brokers, analysts, and CEOs that Lynch had by merely picking up the phone. Also, most investors do not have his knowledge of finance and business practice intricacies. Thus, his advice has to be taken with this in mind. Still, he’s something of a genius and you can benefit from his experience.

His insight into why mutual fund ownership is not a good way to invest (due to philosophy, fees, size, past performance, etc.) is timely advice today in light of recent revelations exposed by NY Attorney General Elliott Spitzer. But his best argument against investing in mutual funds has to be, “You never know where the next great opportunity will be, so don’t get stuck in a fund that won’t take advantage of it.” The good thing about Lynch is that not only does he believe money can be made in the stock market year in and year out, but he’s also proven it. It’s just too bad that approximating his record the way he recommends is a real stretch.

His “buy what you know” and “check out the local malls” makes profitable investing sound easier than it really is. Just because your local clothier is prospering doesn’t mean the store in the same chain 3000 miles away is also doing a bang-up business or that corporate headquarters has got its head on straight.

One area that I wished he’d commented on more was point of entry – when to buy. He talked a lot about liking a stock but missing out it until it had already rallied a goodly percent. The old adage in Wall Street is “I’d rather buy a bad stock at a good price than a good stock at a bad price.” Translation: Every stock has an optimum entry point and if you miss it, you shouldn’t chase it. Find another gem. He doesn’t seem to agree. He’s looking for his “10 baggers.” Stocks that appreciate 1000%. He does stress that the long term stock market return is somewhere around 8% - something we all forgot in the late 90s. So that means there aren’t that many 10 baggers around. Perhaps he should have added in whether he ever used Technical Analysis to time his purchases.

Another weakness is his dependence on company reported earnings growth. We’ve just been through enough scandals to educate us to the fact that “earnings” frequently can be whatever someone wants them to be.

The last half of the book gets bogged down in his thought processes as he finds, researches, and picks his big winners. The mental work is revealing and does have merit in learning how good stock pickers think, but again, it’s not something an individual investor can master as easily as Lynch makes it out to be. Remember, he admits he retired early because of too many 24/7s on the job, whereas the individual investor has to work with what can be easily and accurately obtained.