An Investor Like a Hound Dog - Peter Lynch's Principle of Success

Peter Lynch is a man who started with $1,000 and retired from a $14 billion fund.

 

The boy, born in 1944 in the United States at the age of 10, was left without a father. And the need made him work part-time at the golf club, whose visitors were completely wealthy people. From them the child first heard about the stock market, stocks, bonds, investment. And set a goal to become a millionaire.

 

At the age of 20, he bought shares of the airline for a thousand dollars, which after a while were already worth 10,000.

 

How Peter Lynch works

 

The main professional successes of the American are connected with the investment fund Fidelity Magellan, in which he passed all the steps of the career ladder for 21 years. Including, 13 years led the organization. During this period, the fund's assets increased from $18 million to $14 billion. The number of companies in stocks and bonds with investments increased from 45 to 1,200.

 

When choosing assets, Peter Lynch preferred that growing steadily, albeit slowly. He successfully searched for undervalued papers, but did not dwell on it, and generally approached flexibly on each case. The investor had no set of unwavering rules with fear of violating them. He compared his style of work with a hound dog, which moves quickly and sniffs everything. Stayed on what you like.

 

His main principle he considered the following: to invest in what you understand well. Thus, he not only thoroughly studied the performance of the company - a candidate for investment, but also tried in the case of its products, giving an assessment of quality from the point of view of the consumer. Hence Lynch's distrust of promising technologies that have not yet proven themselves in the case. It was more located to those spheres that proved their necessity over a long period of existence.

 

When the manager left Fidelity Magellan in 1990 at the age of 46, it was the largest investment fund in the world.

 

Tips from Peter Lynch

 

Peter Lynch did not seek to make money by selling his knowledge, which is ubiquitous nowadays. On the contrary, he was willing to advise anyone who was willing to listen.

 

Investors should not be afraid of risk because it is inevitable, Peter Lynch said. But the degree of risk he called to count, and emotions called the main enemy in the work. In his opinion, in asset trading it is necessary to adhere to a pre-planned plan and not to be subjected to panic, especially in times of crisis. During such periods, he urged to act against the crowd in order to stay in the win.

 

Here are a few quotes by Peter Lynch reflecting his philosophy of work:

• You have to know what you're investing in and why. Shooting for good luck, you almost always miss.
• For investments you need to use specially deferred funds, without changing the daily lifestyle.
• Losses always happen, as do income.
• Stocks are like children. It is not necessary to start more than may be in sight.
• If you prefer a long-term investment, do not jump to conclusions, and rely on the results of each month.
• The stock market is merciful - it always gives the loser a chance.