(FORTUNE Magazine) – Every time you glance out the window, more trucks are rolling in and out of the Marvin Mannequin plant across the street from your office. Suddenly the investing bulb flashes on: ''Marvin is selling dummies like crazy. I should check into the stock.'' You discover the company's earnings per share have risen 20% every year for ten years and the stock's price/earnings ratio is only 7. At lunch you wander over to Marvin and casually ask the foreman at the loading dock how things are going. ''Busy -- very busy,'' he says. ''We're absolutely buried in orders.'' After a little more investigating you decide to buy 300 shares. Is that any way to invest? It sure is, says Peter Lynch, portfolio manager of Fidelity Magellan, the best-performing mutual fund over the past decade. One Up on Wall Street (Simon & Schuster, $19.95) is Lynch's endorsement and description of this common-sense, eyes-open style of investing. It's tempting to think he's being ingenuous -- after all, such a successful investor must immerse himself in betas, head-and-shoulders quote patterns, and the capital asset pricing model. But Lynch rejects Wall Street's theoretical paraphernalia and insists that quick-witted individuals have it all over professional investors, a term he considers an oxymoron. Ordinary investors, he believes, can spot trends and pick up clues months or even years before Wall Street figures them out. Sniff around for investing ideas at your workplace, says Lynch, be aware of popular new products selling like oat bran, and pay attention to trends that your kids pick up on. Lynch's thesis is sound, practical, hardly revolutionary -- and amazingly underused. The way to pick a stock, he explains, is to find a thriving business at a cut-rate price. That advice may sound laughably obvious, but think of how many investors ignore it, letting brokers lead them into plodding, familiar stocks for no reason except that the shares sound safe, or picking up a pricey technology issue on a tip that turns out like most tips. Instead, says Lynch, investors should think of buying a stock as what it is: buying a piece of a business. He makes the point persuasively with plenty of how-could-anyone-have-missed-this-one examples, such as Service Corp. International, Dunkin' Donuts, and La Quinta Motor Inns -- all of which he picked early and rode for impressive gains. Bookstores are crammed full of investing books, mostly low-spirited and either patronizingly simple or comprehensible only to risk arbitragers at Goldman Sachs. Not this one. Lynch can tell a story, and he has some fascinating ones with a point -- such as how his wife, Carolyn, discovered L'eggs panty hose at the supermarket, leading Lynch to buy stock in the manufacturer, Hanes, which turned into a huge gainer. He became aware of Taco Bell after sampling a burrito and La Quinta after spending a few nights on its firm mattresses. Lynch is also modest enough to discuss some of his losers, like J. Bildner & Sons, a great sandwich shop across the street from his office that couldn't cut the mustard outside Boston.

To be sure, just because you love to munch Taco Bell burritos does not make the stock a hot tamale. Lynch does a fine job of explaining what to do once you've discovered a promising prospect. After your first hunch (or lunch), put the stock into a category, he says. Ask yourself if the company is a growth stock, a cyclical, an asset play, a turnaround, a stalwart, or a slow grower. Then decide whether that kind of company is one you'd be comfortable owning. Check the price of the business by looking at the outfit's price/earnings ratio over the past several years, its price-to-book-value ratio, or the value of its assets. After more digging around, perhaps calling or visiting the company -- which Lynch calls kicking the tires and does at 500 companies a year -- you should be able to deliver a brief monologue on why you think the stock is a winner. Says he: ''Once you are able to tell the story of a stock to your family, your friends, or the dog (and I don't mean 'a guy on the bus says Caesars World is a takeover'), so that even a child could understand it, you have a proper grasp of the situation.'' Lynch's two-minute drill is a neat way of checking to see if your idea makes sense. Any holes in the story and the stock will probably fall through them. Judging by Magellan's record -- the fund has climbed 1,280% over the past ten years -- Lynch is apparently doing something right. Magellan is America's largest fund, with nearly a million shareholders, and returns have been a bit lower in the past few years than they used to be. The amazing thing is that even with assets of $9 billion -- the size of Guatemala's GNP -- Magellan continues to outpace the market. Through the fund, Lynch owns stocks of 1,400 companies, or 13% of all of America's publicly traded corporations. FOR THE AVERAGE investor, however, assembling even a tiny portfolio of high- octane stocks is a daunting task, and that's the subject on which Lynch's book is weakest. For instance, he says to buy only stocks that pass all his tests: ''Maybe that's a single stock or maybe it's a dozen stocks. There is no use diversifying for the sake of diversity. A foolish diversity is the hobgoblin of small investors.'' A nice line, but he takes the point too far when he says that three to ten stocks are enough for small portfolios. It all depends on how you feel about risk. While diversifying lowers risk, it also reduces your chances of giant gains. But the average small investor probably wouldn't want to own as few as three stocks unless the bulk of his or her investing dollars are in a diversified mutual fund. Another problem: While Lynch thinks all investors should be out kicking the tires, he seems to forget that it's a lot harder for most people than for him, with his easy access to top corporate managers. Which leads to a bit of irony. Lynch champions the individual investor, but his book is also a subtle endorsement of professional money managers. After all, how many of us have time to follow our hunches, poke around for leads, do valuation research, and personally investigate a portfolio's-worth of stocks? Most investors will always need help from top-notch brokers, fund managers, and investment advisers. The implicit message: If you can't follow Lynch's program yourself, you can at least put your money in the hands of someone who does. For example, Peter Lynch. You could do worse.

BOX: EXCERPT: During a lifetime of buying cars or cameras, you develop a sense of what's good and what's bad, what sells and what doesn't. If it's not cars you know about, you know something about something else, and the most important part is, you know it before Wall Street knows it.