Peter Lynch: It’s Not Just ‘Invest In What You Know’

Peter Lynch: It’s Not Just ‘Invest In What You Know’

Peter Lynch, 25 Years Later: It’s Not Just ‘Invest In What You Know’ via Chana R. Schoenberger, The Wall Street Journal

The onetime mutual-fund rock star says the famous advice isn’t quite so simple

Peter Lynch wants you to know that his ideas are being misquoted widely.

“I’ve never said, ‘If you go to a mall, see a Starbucks and say it’s good coffee, you should call Fidelity brokerage and buy the stock,’ ” Mr. Lynch says, some 25 years after his retirement from running Magellan Fund was front-page news.

WSJ Techlive: Greylock’s Sarah Guo On Tech Investments

TechnologyThe technology industry has long been on the receiving end of billions of dollars in capital, but what's next for the industry? Greylock General Partner Sarah Guo joined Wall Street Journal reporter Zoe Thomas to talk about the future of tech investment. Q3 2021 hedge fund letters, conferences and more Seed Funding Thomas asked Guo Read More


The best way to invest is to look at companies competing in the field where you work. Someone with deep restaurant-industry experience would have predicted the success of Panera Bread Co. and Chipotle Mexican Grill Inc., he says: “If you’re in the steel industry and it ever turns around, you’ll see it before I do.”

What’s wrong with the popular-wisdom version of his ideology, which is usually cited as “invest in what you know”? It leaves out the role of serious fundamental stock research. “People buy a stock and they know nothing about it,” he says. “That’s gambling and it’s not good.”


The market is different than in 1990. One of the biggest changes: exchange-traded funds. Mr. Lynch credits their rise with a distrust of mutual-fund managers, which he says is unwarranted. “People accept that active managers can’t beat the market and it’s just not true,” he says. (A Fidelity spokesman says about three-quarters of its 49 equity funds managed by the same portfolio manager for at least five years were beating their benchmark over the manager’s tenure as of Sept. 30.) Mr. Lynch’s advice for small investors: Picking individual stocks is hard even for the professionals. So “if you can’t understand the balance sheet, you probably shouldn’t own it.”

See full article here.

Updated on

No posts to display