Peter Lynch is probably one of the best-known stock pickers of our time and certainly among the most successful. He was portfolio manager of Fidelity Investments’ Magellan Fund for 13 years, starting out in 1977 with $20 million in assets and winding up his tenure in 1990, with more than 1 million shareholders and assets in excess of $14 billion. During that period, Lynch delivered an average annual return of just over 29 percent.
Lynch has served as executive vice president and director of Fidelity Management & Research Company and managing director of FMR Corp. He has also written three bestselling books on investing: ” One Up on Wall Street ” ” Beating the Street ” and his latest, ” Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business “
I recently uncovered and shared a collection of articles that he wrote for Worth Magazine in the 1990s as well. Yesterday was is his 79th Birthday.
I have compiled 79 Peter Lynch investing quotes in celebration for his birthday (plus two additional ones as bonus at the end)
1. Go for a business that any idiot can run – because sooner or later any idiot probably is going to be running it
2. Know what you own, and know why you own it
3. Selling your winners and holding your losers is like cutting the flowers and watering the weeds
4. People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game
5. When you sell in desperation, you always sell cheap
6. A correction is a euphemism for losing a lot of money rapidly
7. Look for small companies that are already profitable and have proven that their concept can be replicated.
8. Be suspicious of companies with growth rates of 50 to 100 percent a year.
9. The typical big winner in the Lynch portfolio (I continue to pick my share of losers, too!) generally takes three to ten years or more to play out.
10. If you find a stock with little or no institutional ownership, you’ve found a potential winner. Find a company that no analyst has ever visited, or that no analyst would admit to knowing about, and you’ve got a double winner. When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm. It frequently happens with banks, savings-and-loans, and insurance companies, since there are thousands of these and Wall Street only keeps up with fifty to one hundred
11. Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out by just sitting there, instead of checking the horse
12. When looking at the same sky, people in mature industries see clouds where people in immature industries see pie
13. Stick with a steady and consistent performer
14. Find something you enjoy doing and give it everything you’ve got, and the money will take care of itself
15. This is one of the keys to successful investing: focus on the companies, not on the stocks16. The more cash that builds up in the treasury, the greater the pressure to piss it away18. There are five basic ways a company can increase earnings*: reduce costs; raise prices; expand into new markets; sell more of its product in the old markets; or revitalize, close, or otherwise dispose of a losing operation.19. Avoid hot stocks in hot industries.20. Great companies in cold, nongrowth industries are consistent big winners21. Distrust diversifications, which usually turn out to be diworseifications.22. Long shots almost never pay off.23. It’s better to miss the first move in a stock and wait to see if a company’s plans are working out.24. People get incredibly valuable fundamental information from their jobs that may not reach the professionals for months or even years.25. Separate all stock tips from the tipper, even if the tipper is very smart, very rich, and his or her last tip went up.26. Some stock tips, especially from an expert in the field, may turn out to be quite valuable. However, people in the paper industry normally give out tips on drug stocks, and people in the health care field never run out of tips on the coming takeovers in the paper industry.27. Invest in simple companies that appear dull, mundane, out of favor, and haven’t caught the fancy of Wall Street.28. The best way to […]
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