The Four Tenets of Peter Lynch [Slides]

Four Tenets Of Peter Lynch Kotak Securities, Slide Share

Who is Peter Lynch?

• The legendary investment guru and one of the most famous fund managers in the US
• The one who from 1977-1990 managed the Fidelity Magellan Fund and was the best performer in mutual funds over that period
• Has written various books on investing, which hold a wealth of ‘practical’ knowledge

The Four Tenets of Peter Lynch

• Invest in what you know
  • Simple & most famous principle by Peter Lynch
  • This rule applies even to the amateur non professional investor
  • With this rule, the amateurs can outperform even the market experts
• Buy what they don’t know
  • Avoid glamour and seek out the overlooked
  • The best bargains can be found among these neglected stocks
  • Boring is good
  • Small, underfollowed companies present the greatest opportunities to long-term investors
• Mutual Funds as an option
  • Based on the principle that when you pick up your own stocks, you ought to outperform the experts.
  • Otherwise, it doesn’t make much sense to invest by oneself.
  • The mutual fund is wonderful for people who have neither the time nor the inclination to test their wits against the stock market
• Don’t waste time worrying
  • It is futile to predict the economy and the stock market
  • Focus on the “facts” at hand rather than worry about the future
  • Don’t sell the stock if the ‘story’ is still good, whether the market is up or down.

See full slides below.