Peter Lynch

[winston]

From Washington Post:-

Peter Lynch, former manager of the flagship Magellan Fund at Fidelity Investments:

On the economy: We've had 11 recessions since World War II and we've had a perfect score -- 11 recoveries. There are a lot of natural cushions in the economy now that weren't there in the 1930s. They keep things from getting out of control.

We have the Federal Deposit Insurance Corporation [which insures bank deposits]. We have social security. We have pensions. We have two-person, working families. We have unemployment payments. And we have a Federal Reserve with a brain.

On investing: I would not disagree that corporate bonds look attractive versus money markets. But I would think stocks are more attractive. But you have to have a time horizon further out than three weeks from Wednesday. Even one year, two years is not long enough. I'm very happy and content that five, 10, 15 years from now, corporate profits will be higher and the stock market will be a lot higher.

You need to have an edge to stock-pick. Buy what you know. If you're in an industry, you can probably find some companies in your field. If you're in the insurance industry, you're going to see things get better before I see them. All you need is a few good stocks a decade. Why don't you use your own industry knowledge? You have a huge edge on the professionals.

There are 7,000 or 8,000 public companies. You really ought to know 10 cold. Know their financial position, know what they do. And those are the ones you concentrate on. And when they get to be clearly attractive, then you understand them.

This dramatic decline in stock prices has affected great companies and good companies and mediocre companies. It's brought them all down. Bargains are all over the place. There are so many attractive stocks out there. But they keep going down. I've definitely been pounded. To use a golf analogy, I'd like to take a couple of mulligans.

[winston]

A good place to be

The so-called lost decade has not shaken legendary investor Peter Lynch's belief that the stock market will continue to offer the best returns.

Roee Bergman; 18 Feb 10 17:12

The dismal returns of the past ten years have made them known as the lost decade on the US stock market, raising the question whether investment in stocks has lost its luster.

Who better to answer that question than the person considered one of the best mutual fund managers in US history, Peter Lynch?

http://www.globes.co.il/serveen/globes/ ... 5&fid=1724

[winston]

"Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business."

Peter Lynch

[winston]

"The key to making money in stocks is not to get scared out of them."

Peter Lynch

[kennynah]

"The key to making money in stocks is to control the amount of losses foremost"

kennynah

[winston]

If you have read the books by Peter Lynch, he mentioned that every 2 years or so, there's a correction of 10%. And every 4 years or so, there's a correction of 25%.

If you are prepared for such corrections and have the cash to buy during the corrections, then you would be rewarded.

So is this a 10% correction or a 25% correction ?

Looking at the way that the lemmings are behaving, they think that this is a 80% correction

[winston]

How to Learn From the Greatest of All Time By Alexander Green

As a young man starting out in a stock brokerage 27 years ago, I made a startling discovery. The "analysts" at my firm picking stocks for clients weren't just bad... they were awful.

I soon found myself looking for ideas outside my "research department." And I figured if I were going to learn from someone else, why not the best?

That led me to Peter Lynch, the then-manager of the Fidelity Magellan Fund and, to this day, the top-performing equity fund manager of all time.

I studied his annual reports. I listened to tapes of him speaking to investment audiences. And I read and re-read his two investment classics: One Up On Wall Street and Beating the Street.

Lynch argued that the individual investor has a huge advantage over Wall Street professionals. After all, you don't have to move mountains of money around, worry about quarterly results, or diversify into hundreds of stocks when concentrating on just a few dozen leads to better results.

Peter Lynch taught me:

• Behind every stock is a company. Find out what it's doing.

• Never invest in any idea you can't illustrate with a crayon.

• Over the short term, there may be no correlation between the success of a company's operations and the success of its stock. Over the long term, there's a 100% correlation.

• Buying stocks without studying the companies is the same as playing poker - and never looking at your cards.

• Time is on your side when you own shares of superior companies.

• Owning stock is like having children. Don't get involved with more than you can handle.

• When the insiders are buying, it's a good sign.

• Unless you're a short seller, it never pays to be pessimistic.

• A stock market decline is as predictable as a January blizzard in Colorado. If you're prepared, it can't hurt you.

• Everyone has the brainpower to make money in stocks. Not everyone has the stomach.

• Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what's actually happening to the companies in which you've invested.

Lynch's advice had a profound effect on my stock market approach. He taught me that investment success isn't the result of developing the right macro-economic view or deciding when to jump in or out of the market.

Success is about researching companies to identify those that are likely to report positive surprises.

Source: Investment U

[winston]

11 Lessons From Peter Lynch by Alexander Green

Peter Lynch taught me:

• Behind every stock is a company. Find out what it’s doing.

• Never invest in any idea you can’t illustrate with a crayon.

• Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.

• Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.

• Time is on your side when you own shares of superior companies.

• Owning stock is like having children. Don’t get involved with more than you can handle.

• When the insiders are buying, it’s a good sign.

• Unless you’re a short seller, it never pays to be pessimistic.

• A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.

• Everyone has the brainpower to make money in stocks. Not everyone has the stomach.

• Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market.

Success is about researching companies to identify those that are likely to report positive surprises.

http://www.investmentu.com/2012/July/peter-lynch.html

[winston]

Peter Lynch – The Perfect Stock

Source: GuruFocus

http://www.thetradingreport.com/2014/12 ... ect-stock/

[winston]

Lynch’s Secret to Finding Value Discovers Little in S&P 500

http://www.bloomberg.com/news/articles/ ... in-s-p-500