Peter Lynch Lyrics: Trying Not To Look Bad

The following notes was taken from a forum posting. If not mistaken the original writings were posted at Wallstraits.com

Lynch Lyrics
Trying not to look bad

"Whoever imagines that the average Wall Street professional is looking for reasons to buy exciting stocks hasn't spent much time on Wall Street. The fund manager most likely is looking for reasons not to buy exciting stocks, so that he can offer the proper excuses if those exciting happen to go up. 'It was too small for me to buy', 'there was no track record', 'it was in a nongrowth industry', 'unproven management', 'the employees belong to a union', or 'the competition will kill them'."


"With survival at stake, it's the rare professional who has the guts to traffic in an unknown (small stock). In fact, between the chance of making an unusually large profit on an unknown company and the assurance of losing only a small amount on an established company, the normal mutual-fund manager, pension-fund manager, or corporate portfolio manager would jump at the latter. Success is one thing, but it's more important not to look bad if you fail. There's an unwritten rule on Wall Street: 'You'll never lose your job losing your client's money in IBM'".

"If IBM goes bad and you bought it, the clients and the bosses will ask: 'What's wrong with that damn IBM lately?' But if (small stock) goes bad, they'll ask: 'What's wrong with you?' That's why security-conscious portfolio managers don't buy Wal-Mart when the stock sells for $4, and it's in a dinky little town in Arkansas, but soon to expand. They buy Wal-Mart when there's an outlet in every large population center in America, fifty analysts follow the company, and the chairman of Wal-Mart is featured in People magazine as the eccentric billionaire who drives a pickup truck to work. By then the stock sells for $40."


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