Peter Lynch - One of the Greats

[Viking]

I recently came across the attached video on Peter Lynch. I think it is an excellent introduction for people who do not know him. And also a good review for the rest of us. His book “One Up On Wall Street” is one of my top 5 best books on investing for the impact it had on me when i was getting started and still today. (At the same time i first read Lynch’s book i was also reading: Ben Graham’s “Intelligent Investor”, Robert Hagstrom’s “The Warren Buffett Way” (1st Edition), Burton Malkiel’s “A Random Walk Down Wall Street”… amazing the information available to investors, even back then.)

 

In terms of educating investors, I put Peter Lynch in the same category as Buffett and Graham (close enough for me). Lynch has lots of very useful advice:

- if you don't have the time/interest/skill to buy individual stocks buy an ETF (called a mutual fund in his day)

- only invest in what you know/understand well - this might be his most important point (and often gets drowned out by all the other good things he has to say)

- volatility is opportunity

- sell only when the story changes/deteriorates (don't pull the flowers and water the weeds)

- you don't need to be right with every pick

- it helps if you have an edge

- ignore macro / general news media

- market timing doesn't work

 

My add (and I am sure Lynch would agree): small investors have three more big advantages today compared to 1994:

1.) access to information has never been better - see my bolded point above!

2.) transaction costs have dropped significantly which increases return for investors

3.) tax advantaged accounts are now available (in Canada - RRSP, TFSA, RESP and soon to start Home Buyer Plan) which increases after-tax return for investors

 

 

 

 

Edited February 5, 2023 by Viking

[maxthetrade]

Completely agree! I read Lynch's books before I ever heard about Buffett or Graham and it was a real eye opener to me. Thinking about it I probably first read about Buffett in one of Lynch's books when he said something to the effect that Buffett does what he did but buys the whole company. This was all in the pre internet days in the early nineties. It was very difficult to even get annual reports of US companies in Germany...

Definitely one of my heroes!

 

Edited February 5, 2023 by maxthetrade

[tede02]

This is a legendary talk. I also started with Lynch's books in the early 2000s. It is what introduced me to investing and led me on to Buffett. 

[DooDiligence]

BtS and OUoWS were a lot of peoples first books.