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Worlds’ Greatest Investors Part 2; Peter Lynch

We profile some of the greatest investors in the world. Their achievements have influenced and inspired many. In Part 2, we feature Peter Lynch.

 

 

Peter Lynch

 

 

1) Peter’s Famous Quotes

 

  • "Everyone has the brainpower to follow the stock market. If you made it through fifth grade math, you can do it."

  • "Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it."

 

2) Peter’s Backround

Peter Lynch is the most famous mutual fund manager.  Peter Lynch was born in 1944 and started managing the Fidelity Magellan Fund in 1978.  When he started, the fund had assets of $20 million. When he retired in 1990, the Fidelity Fund had assets of $14 billion. Today the fund has assets of over $50 billion. 

 

3) Peter’s Investment Style 

Peter Lynch's strategy was to adjust to whatever investment style worked at the time. He took a lot of risks over the years yet never had a losing year. The fund had a amazing average return of 29% per year. Lynch believed in investing in 'what you know' and to always be fully invested. Lynch generally looked for three qualities in a good company: profitability, price and a good business model. If he is excited by a particular product or service, he ensures that it accounts for a sufficient percentage of total company sales and makes a significant contribution to profits. He favours companies with a strong cash position and a forward PE ratio well below their forecasted EPS growth rate. Lynch avoids companies with high Debt Equity ratios, slow sales growth and cyclical stocks.

 

 

 

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