Peter Lynch
Interesting quotes
Blog post: More famous than Warren Buffett in decades past, Peter Lynch of Fidelity says it’s still all about investing in what you know
Link: https://finance.yahoo.com/news/more-famous-warren-buffett-decades-213200856.html
If you don’t understand what you own, you’re toast.
on the bus — you know? And they have no idea what they’re doing. And somebody invented this awful term, before I got in the business, called play the market.
you have to know what they do. An investor should be able to “explain to an 11-year-old in a minute or less” what the case is for owning shares of a particular company — not just that “this sucker’s going up.
Investors have lost far more money preparing for corrections or trying to anticipate corrections than in actual corrections. Similarly, in the economy, everyone, including the experts, is often wrong — for instance, two years back, in widely forecasting a recession in 2024. economists have predicted 33 of the last 11 recessions.”
Investors have to be cognizant that they can and will lose money on the markets. Someone with three kids about to start college, he said, shouldn’t be in stocks but in less risky money-market funds.
Instead of analyzing economic and market forecasts, it’s important to look at savings rates, employment, oil prices, industries that have gone from miserable to improving. “I just want to know facts right now,” he said.
The business of investment really hasn’t changed much over the decades, even with the rapid evolution of trading tools and the ready availability of data and information. “It’s the same thing, this success of Amazon AMZN, Costco COST, Walmart WMT — forget the technology companies [such as big 2025 winner] Oracle ORCL,” he said. Those companies have done well for average investors, and Fidelity placed big investments in all of them “just using public information,” Lynch said.
Lynch was queried by Brown about whether average investors can, as in the long-ago-expressed Lynch belief, fare as well as a big Wall Street investor, and said he still believes they can, if they look for opportunity in fertile places.
“People tend to concentrate about what’s in the new-high list,” he said, and those stocks can go up further, but he likes to look at companies on the low list.
Fidelity Investment’s Magellan Fund FMAGX
Between 1977 and 1990, averaged a 29.2% annual return and consistently outperformed the S&P 500 SPX.1