Peter Lynch is the best-performing fund manager of all time.
His book "One Up on Wall Street" is the best introduction to investing that you can get.
If you want to learn about investing, internalize these 7 lessonsπ
His book "One Up on Wall Street" is the best introduction to investing that you can get.
If you want to learn about investing, internalize these 7 lessonsπ
1. Lynch's Most Important Message
Individual Investors have an advantage over Professional investors.
This seems unintuitive at first.
How can an individual outperform professionals with unlimited resources?
The reasons are simple:
Individual Investors have an advantage over Professional investors.
This seems unintuitive at first.
How can an individual outperform professionals with unlimited resources?
The reasons are simple:
2. Stocks Follow Earnings
Sooner or later, stocks follow earnings.
In today's world, we are bombarded with news every second of the day.
There are hundreds of things that allegedly impact your stocks.
But investing doesn't have to be that complicated. Stocks follow earnings:
Sooner or later, stocks follow earnings.
In today's world, we are bombarded with news every second of the day.
There are hundreds of things that allegedly impact your stocks.
But investing doesn't have to be that complicated. Stocks follow earnings:
3. Mistakes and Bad Calls
You don't need to be right on every investment you make.
Consider this example:
You invest $100,000 equally weighted over 10 stocks for 10 years.
Now look at the table. Even if you are wrong on 6(!) out of your 10 stocks, you do fine.
You don't need to be right on every investment you make.
Consider this example:
You invest $100,000 equally weighted over 10 stocks for 10 years.
Now look at the table. Even if you are wrong on 6(!) out of your 10 stocks, you do fine.
4. Ten Baggers
In the table from above, you've seen one Ten Bagger (a stock that 10x).
Lynch was great at finding them throughout his career.
He analyzed those stocks and came up with 10 criteria for ten baggers:
In the table from above, you've seen one Ten Bagger (a stock that 10x).
Lynch was great at finding them throughout his career.
He analyzed those stocks and came up with 10 criteria for ten baggers:
5. Reversed Ten Baggers
Lynch also came up with a list of disqualifying criteria for ten baggers.
This list contains points that make it unlikely a company will ever become a ten-bagger or a good investment in general:
Lynch also came up with a list of disqualifying criteria for ten baggers.
This list contains points that make it unlikely a company will ever become a ten-bagger or a good investment in general:
6. Six Types of Companies
According to Lynch, there are six types of companies.
Each of them has characteristics differentiating them from each other.
As an investor, you can see which fits your investing strategy the best.
No category is necessarily better than another.
According to Lynch, there are six types of companies.
Each of them has characteristics differentiating them from each other.
As an investor, you can see which fits your investing strategy the best.
No category is necessarily better than another.
7. Market Crashes are Normal
Many investors fear market crashes.
But they're normal. Here are the statistics:
10% decline: Every Few Years
20% decline: Every Six Years
30%+ decline: About Every Decade
Don't fear them, use them to your advantage and buy cheap stocks.
Many investors fear market crashes.
But they're normal. Here are the statistics:
10% decline: Every Few Years
20% decline: Every Six Years
30%+ decline: About Every Decade
Don't fear them, use them to your advantage and buy cheap stocks.
That's it for today!
If you enjoyed it, please Like and Retweet this Thread so more people can see it!
Follow me @MnkeDaniel to learn more about Investing.
Have a great day!
If you enjoyed it, please Like and Retweet this Thread so more people can see it!
Follow me @MnkeDaniel to learn more about Investing.
Have a great day!
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