Inside the Brain of an Investing Genius
http://investingcaffeine.com/2015/08/15 ... -genius-2/
“GARP” — growth at a reasonable price
“Far more money has been lost by investors trying to anticipate corrections than lost in the corrections themselves”.
Timing the market is a fool’s errand. Not even investment legends could accurately predict the onset of recessions or the end of bull markets.
Lynch focused on defensive growth companies that would see their earnings rise despite market corrections.
Boring companies with competitive advantages and steady growth were a prime target during recessions. Demand for their goods and services is likely to remain robust regardless of the market cycle.
Price-to-earnings-growth (PEG) ratio.
To gauge a company's balance sheet health, it's important to look at the company's debt-to-equity ratio, or how much debt they have relative to their assets.
Looking for something that's a good story... So you have to find a company that's either a turnaround or a company that's going to grow.
What is the reason the stock should be higher?
“So the reason I wrote 'One Up On Wall Street' was to help people that wanted to do investing. I'm not saying do it, but if you do it, there's a certain way to do it. If you don't do it that way, you probably are gonna have an unfortunate outcome,” said Lynch, now 79.
His secret to success, ‘buy what you know,’ was the kind of common sense explanation most people could understand and act on without any special insider periscope. What goods and services are you and your family and friends buying? Use that as clues to start doing some homework to learn more about the company.
You have to ask: What’s the inning of the ball game?
One way I did well was buying small companies.
You have to do the work and use your brain, but who's got the stomach when something bad happens.
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