Peter Lynch Quotes And Stock Principles
Wednesday, August 27, 2008
"Thousands of experts study overbought indicators, oversold indicators,
head-and-shoulder patterns, put-call ratios, the Fed's policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can't predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack."
- Peter Lynch, One Up On Wall Street
head-and-shoulder patterns, put-call ratios, the Fed's policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can't predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack."
- Peter Lynch, One Up On Wall Street
"There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they'd all be millionaires by now...as far as I know, most of them are still gainfully employed, which ought to tell us something." - Peter Lynch, One Up On Wall Street
"We must remember that capitalism almost by definition is a system of excess and self corrections"............. Said differently, our job is to help you be greedy when others are frightened, and cautious when others are greedy....... "Correction can be a scary experience...how should we react? Mostly by doing nothing." - Peter Lynch
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Lynch's Stocking 20 Principles:
2. Avoid the herd...venture where others fear.
3. Short-term there's little correlation between a company's earnings success and its stock price...long-term there's a 100% correlation; so, buy quality and be patient.
4. Know what you own and why you own it.
5. Long shots almost always miss the mark.
6. 5-10 companies are all the average investor can adequately follow.
7. It's OK-lah to hold cash when you don't find attractive stocks.
8. Never buy a stock unless you understand its balance sheet.
9. Avoid hot stocks in hot industries...look for great companies in boring industries.
10. Avoid small companies until they become profitable.
11. You only need a few great stocks to make a lifetime of investing worthwhile.
12. In your industry or your neighborhood you have the advantage over professionals.
13. Stock prices always fall sometime-giving the prepared investor a bargain.
14. Everyone has the brains to buy stocks, few have the stomach.
15. Ignore news of doom, focus on fundamentals.
16. Ignore interest rates, economy & stock market forecasts-focus on your companies.
17. Only 1 in 10 companies you study will uncover a story better than expected...thus, you'll need to sturdy 50 companies to find 5 investments.
18. Buying a stock without studying the company is just gambling.
19. Time is on your side when you own stock in a good company.
20. In the long run, a well-chosen portfolio of stocks will soundly ourperform fixed rate investments like bonds or moneymarkets
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ps: This is the last of my Peter Lynch articles collection. Hope you have enjoyed it.
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