Peter Lynch was a famous mutual fund manager, managing the multi-billion Fidelity Magellan Fund and handily beat the market over his tenure.
I’m not sure whether it was his humility, his intellectual, or his unwavering optimism that lead to this stock-picking genius’s market-beating returns, but his success made him a household name in the 90s.
In fact, his stock-picking prowess made him a legend in the investing field for nearly 20 decades.
Lynch was widely known for his “invest in what you know” philosophy. While many people assumed this meant you should just buy stocks in the companies whose product you like and use, he warned against this reckless behavior and advised to look deeper and study the financials of the companies first.
Whether you have heard of him or not, here’s a great video from 1994 where he talks about investing and how to develop a winning formula.
Stocks shouldn’t be considered lottery tickets. There’s a company behind every stock, and earnings behind every company. You can become an expert investor, but you need to do your homework, which most “investors” usually skimp on.
When seeking stocks in troubled companies, always look for companies with sound financial balance sheets. Bankruptcy is a real concern, and he famously said companies with no debt can’t go bankcrupt. They can try, but it’s awfully hard!
Here’s a great video that distills quite a bit of his knowledge in a short period of time. It’s a must-see for any investor who’s interesting in picking individual stocks.
Even though this 45 minute video is over 20 years old, the wit and wisdom is timeless.
You can learn more about his timeless strategies for picking winning stocks in this classic book: One Up On Wall Street.
This was one of the first investment books I read and I highly recommend it.