Peter Lynch graduated from Boston College in 1965 with a degree in finance. He served two years in the Army before attending and graduating from the Wharton School at the University of Pennsylvania with a Master’s degree in Business Administration in 1968.
He began working for Fidelity Investments as an investment analyst, as subsequently became director of the research department, a position he held between 1974-1977. Lynch was appointed manager of the little-known fund Magellan Fund in 1977 and achieved historic results for the portfolio in the coming years until his retirement in 1990.
One of the most successful and famous investors of all time – Peter Lynch, builds that name by the management of the assets of the Fidelity Magellan Fund. It has increased assets under management by nearly $ 20 million to a staggering $ 14 billion – making it by achieving an average annual return of 29%. Moreover, Lynch has surpassed the yield of the S & P 500 Index in 11 of these 13 years.
In 2007, Peter Lynch served as Vice – President of the investment adviser to Fidelity – Fidelity Management & Research Co. Since his retirement, he is active in various charitable endeavors.
Often described as a “chameleon,” Lynch adapted to whatever investment style worked at a specific time. It is said that his work schedule is “24/7”. He was in contact with company managers, investment managers, industry experts and analysts around the clock.
Apart from this criminal work ethic, Lynch has consistently applied the full set of eight basic principles in the process of stock selection. He shares his list of principles with the audience an investment conference in New York in 2005 .:
Known well what you own.
It is futile to predict the economy and interest rates.
You have enough time to identify and recognize exceptional companies.
Avoid long shots.
Good governance is very important – buy good companies.
Be flexible and humble, and learn from your mistakes.
Before making a purchase, you should be able to explain why buying.
There is always something to worry about.
In selecting stocks, Peter Lynch adhered to what they knew or could easily understand. This was an essential position for him. He ignored the market noise and is focusing on the foundation of a company by using a bottom-up approach. Invested only in the long term, and did not pay attention to short-term market fluctuations. His investment style is described as adaptive to the current economic environment, but Lynch has always emphasized that you should be able to understand what you own.
Peter Lynch is known as the author of several books that are part of the library of many investors as classics include Beating The Street (1993) and One Up On Wall Street (1989). Many investors usually give Peter Lynch as an example that active management can achieve better results compared with a given index.
Some famous quotes Peter Lynch are:
“Head to the business to which any idiot can be targeted – because sooner or later, any idiot probably will.”
“If you stay half-alert, you can choose the most spectacular performing stocks of your workplace or shopping center in the neighborhood, and long before Wall Street to find them.”
“Investing without research is like playing poker and never looking at the cards.”
“In the absence of many surprises, stocks are relatively predictable for twenty years. As to whether they will be higher or lower in two to three years, may throw a coin to decide.”
“If you spend more than 13 minutes analyzing economic and market forecasts, you’ve lost 10 minutes.”