Beating the Street with Peter Lynch

Peter Lynch didn’t just beat the Street … he absolutely destroyed it. Reflect on his record for a second. Lynch ran FUNNYFidelity’s Magellan Fund from 1977 to 1990, beating the S&P 500 in all but two of those years. He averaged annual returns of 29%. That’s a mind-blowing figure. It means that $1 grew to more than $27; if you invested as little as $37,000 with him in 1977, you were a millionaire in 1990.

Sharing some his thoughts towards the market :-

  1. When the operas outnumber the football games three to zero, you know there is something wrong with your life.
  2. Gentleman who prefers bonds don’t know what they are missing.
  3. Never invest in any idea you can’t illustrate with a crayon. 
  4. You can’t see the future through a rear view mirror
  5. There’s no point paying Yo-Yo Ma to play a radio.
  6. As long as you’re picking a fund, you might as well pick a good one.
  7. The extravagance of any corporate office is directly proportional to management’s reluctance to reward the shareholders.
  8. When yield of a long term bonds exceed the dividend yield of the S&P 500 by 6 % or more sell your stock and buy bonds.
  9. Not all common stocks are equally common.
  10. Never look back when you are driving on the autobahn.
  11. The best stock to buy may be the one you already own.
  12. A sure cure for taking a stock for granted is a big drop in the price.
  13. Never bet on a comeback while they are playing “Taps”.
  14. If you like the store, chances are you will love the stock.
  15. While insiders are buying, it’s a good sign – unless they happen to be New England bankers.
  16. In business, competition is never as healthy as total domination.
  17. All else equal, invest in the company with the fewest color photograph in the annual reports.
  18. When even the analysts are bored, it’s time to start buying.
  19. Unless you’re a short seller or a poet looking for a wealthy spouse, it never pays to be pessimistic.
  20. Corporations, like people , change their names for one of two reasons: either they’ve gotten married or they’ve been involved in some fiasco that they hope the public will forget.
  21. When the queen is selling, buy it.

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