Peter Lynch Quotes
Peter Lynch Quotes
I talk to hundreds of companies a year and spend hour after hour in heady pow-wows with CEO’s, financial analysts and my colleagues in the mutual-fund business, but I stumble onto the big winners in extracurricular situations, the same way you do.
Logic is the subject that has helped me most in picking stocks, if only because it taught me to identify the peculiar illogic of Wall Street. Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out just by sitting there, instead of checking the horse. A lot of investors sit around and debate whether a stock is going up, as if the financial muse will give them the answer, instead of checking the company.
The list of qualities (an investor should have) include patience, self-reliance, common sense, a tolerance for pain, open-mindedness, detachment, persistence, humility, flexibility, a willingness to do independent research, an equal willingness to admit mistakes, and the ability to ignore general panic.
Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets.
What makes stocks valuable in the long run isn’t the market. It’s the profitability of the shares in the companies you own. As corporate profits increase, corporations become more valuable and sooner or later, their shares will sell for a higher price.
It’s human nature to keep doing something as long as it’s pleasurable and you can succeed at it, which is why the world population continues to double every 40 years.
The natural-born investor is a myth.
Behind every stock is a company. Find out what it’s doing.
When stocks are attractive, you buy them. Sure, they can go lower. I’ve bought stocks at $12 that went to $2, but then they later went to $30. You just don’t know when you can find the bottom.
Owning stocks is like having children don’t get involved with more than you can handle.
All the math you need in the stock market you get in the fourth grade.
Stocks aren’t lottery tickets. There’s a company attached to every share.
In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.
Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.
In the long run, a portfolio of well-chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account. In the long run, a portfolio of poorly chosen stocks won’t outperform the money left under the mattress.
There is always something to worry about. Avoid weekend thinking and ignoring the latest dire predictions of the newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.
If you hope to have more money tomorrow than you have today, you’ve got to put a chunk of your assets into stocks. Sooner or later, a portfolio of stocks or stock mutual funds will turn out to be a lot more valuable than a portfolio of bonds or CDs or money-market funds.
Peter Lynch Quotes about Mutual Funds
In the long run, a portfolio of well-chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account. In the long run, a portfolio of poorly chosen stocks won’t outperform the money left under the mattress.
If you have the stomach for stocks, but neither the time nor the inclination to do the homework, invest in equity mutual funds.
Equity mutual funds are the perfect solution for people who want to own stocks without doing their own research.
Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.
Peter Lynch Quotes about Study
As I look back on it now, it’s obvious that studying history and philosophy was much better preparation for the stock market than, say, studying statistics.
So while I was in college I did a little study on the freight industry, the air freight industry. And I looked at this company called Flying Tiger. And I actually put a thousand dollars in it and I remember I thought this air cargo was going to be a thing of the future.
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 Quotes about Running
Invest in businesses any idiot could run, because someday one will.
Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.
What makes stocks valuable in the long run isn’t the market. It’s the profitability of the shares in the companies you own. As corporate profits increase, corporations become more valuable and sooner or later, their shares will sell for a higher price.
In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.
Peter Lynch Quotes about Lifetime
It only takes a handful of big winners to make a lifetime of investing worthwhile.
You only need a few good stocks in your lifetime. I mean how many times do you need a stock to go up ten-fold to make a lot of money? Not a lot.
All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.
Peter Lynch Quotes about Selling
There are substantial rewards for adopting a regular routine of investing and following it no matter what, and additional rewards for buying more shares when most investors are scared into selling.
Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.
My high-tech aversion caused me to make fun of the typical biotech enterprise: $100 million in cash from selling shares, one hundred Ph.D.’s, 99 microscopes, and zero revenues.
Peter Lynch Quotes about Finance
In our society, it’s been the men who’ve handled most of the finances, and the women who’ve stood by and watched men botch things up.
Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets.
Stocks are a safe bet, but only if you stay invested long enough to ride out the corrections.
Spend at least as much time researching a stock as you would choosing a refrigerator.
Peter Lynch Quotes about Management
The extravagance of any corporate office is directly proportional to management’s reluctance to reward the shareholders.
When management owns stock, then rewarding the shareholders becomes a first priority, whereas when management simply collects a pay check, then increasing salaries becomes a first priority.
Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.
If you spend more than 13 minutes analysing economic and market forecasts, you’ve wasted 10 minutes
Peter Lynch Quotes about Worry
Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.
That’s not to say there’s no such thing as an overvalued market, but there’s no point worrying about it.
There is always something to worry about. Avoid weekend thinking and ignoring the latest dire predictions of the newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.
Peter Lynch Quotes about Making Money
Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.
The real key to making money in stocks is not to get scared out of them.
Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.
Everyone has the brain power to make money in stocks. Not everyone has the stomach.
Peter Lynch Quotes about Lottery
An important key to investing is to remember that stocks are not lottery tickets.
The basic story remains simple and never-ending. Stocks aren’t lottery tickets. There’s a company attached to every share.
Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part-ownership of a business.
Peter Lynch Quotes about Opportunity
A price drop in a good stock is only a tragedy if you sell at that price and never buy more. To me, a
price drop is an opportunity to load up on bargains from among your worst performers and your laggards that show promise. If you can’t convince yourself ‘When I’m down 25 percent, I’m a buyer’ and banish forever the fatal thought ‘When I’m down 25 percent, I’m a seller,’ then you’ll never make a decent profit in stocks.
Bargains are the holy grail of the true stock picker. The fact that 10 to 30 percent of our net worth is lost in a market sell-off is of little consequence. We see the latest correction not as a disaster but as an opportunity to acquire more shares at low prices. This is how great fortunes are made over time.
A stock market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.
Peter Lynch Quotes on Investing
The person that turns over the most rocks wins the game. And that’s always been my philosophy.
The simpler it is, the better I like it.
If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth-grader could understand, and quickly enough so the fifth grader won’t get bored.
During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents and blue-jeans (Levi Strauss) made a nice profit.
Peter Lynch Quotes about Wall
Logic is the subject that has helped me most in picking stocks, if only because it taught me to identify the peculiar illogic of Wall Street. Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out just by sitting there, instead of checking the horse. A lot of investors sit around and debate whether a stock is going up, as if the financial muse will give them the answer, instead of checking the company.
Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.
There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it. Shun the enterprise around the corner, which can at least be observed, and seek out the one that manufactures an incomprehensible product.
Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert.
Peter Lynch Quotes about Philosophy
As I look back on it now, it’s obvious that studying history and philosophy was much better preparation for the stock market than, say, studying statistics.
The person that turns over the most rocks wins the game. And that’s always been my philosophy.
There’s lots of stocks out there and all you need is a few of ’em. That’s been my philosophy.
Peter Lynch Quotes about Money
If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.
Know what you own, and know why you own it.
The real key to making money in stocks is not to get scared out of them.
Best Peter Lynch Quotes
Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.
The stock market really isn’t a gamble, as long as you pick good companies that you think will do well, and not just because of the stock price.
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