Legendary investor and Fidelity fund manager Peter Lynch was interviewed by Charlie Rose on Bloomberg TV on Thursday. The nearly half-hour interview covered a broad range of subjects, spanning Lynch’s current activities and past accomplishments. Peter Lynch authored three books on investment along with John Rothchild. Of these books, One Up On Wall Street, Beating the Street and Learn to Earn, the first two were phenomenal pieces of work, and best sellers.

Peter Lynch

Peter Lynch today

Peter Lynch retired from Fidelity over two decades ago, but he has remained active as an investor and a philanthropist. He also serves on the boards of a number of nonprofits, especially education-related organizations. Lynch also confided to Rose that he is finally planning to really slow down, and that vacations to Turkey and Russia are on the agenda.

U.S. education system

Education, and the ongoing decline of the U.S. educational system, is an important issue for Lynch. Peter Lynch emphasizes that a good education is essential for success in the modern world, but that around a third of U.S, students are not getting the kind of education they need to find 21st-century jobs. He also mentions that a number of states have begun innovative new programs that feature subject area-focused quarterly testing rather than make-or-break annual testing.

“Bottom-down” investing

Peter Lynch readily admits that his investment strategy basically ignores macroeconomics. “When the markets go down, I go down,” he said, laughing. He continued to say as long as you’d done your research, you knew the fundamental stories of the companies you’d invested in would eventually play out.

He said good investing was really about getting in at the right time. He used a baseball analogy. You don’t want to get in when the manager is writing the lineup, but instead try to get in around the 2nd or 3rd inning when the game/company success is just starting to play out. He points out that if you wait until the 7th or 8th inning when the game is much further along, a lot of your upside is already gone.

Avoid complacency

It is very easy to become complacent and rest on your laurels, Peter Lynch warns. He said always having a plan and staying focused on your goals were the keys to avoiding complacency, especially as an upper manager.

Peter Lynch also emphasized that in his experience great managers really listen. They understand the importance of knowledge. Good managers avoid having subordinates filter information from them. They go out and do their own research so they can keep a thumb on the pulse of their investments.

Invest in what you know

When elaborating on his investing mantra of “invest in what you know”, Peter Lynch also pointed out that “you just need a few in a lifetime” when it comes to ten bagger stocks. He also guesstimated that he was probably only right in six out of 10 investments while he was at Fidelity, but he usually made at least a double or triple on his winners versus a much smaller loss on his losers.