Peter Lynch Quotes

Corporate profits will be a lot higher 10 years from now. They'll be a lot higher 20 years from now. That's what you can rely on. Microsoft didn't exist 20 years ago. Staples didn't exist 20 years ago—Federal Express didn't exist 20 years ago. New companies will come along. That's what makes stocks go up.

To me, an investment is simply a gamble in which you’ve managed to tilt the odds in your favor.

If You Spend 13 Minutes A Year On Economics, You've Wasted 10 Minutes

In dieting and in stocks, it is the gut and not the head that determines the results.

This is a crucial safeguard of our capitalist system, because if shareholders could be sued whenever a company made a mistake, people like you and me would be afraid to buy shares and become investors. Why would we want to run the risk of being held responsible for another big oil spill, or a rat hair in a hamburger, or the endless variety of mishaps that occur in business every day? Without limited liability, nobody would want to buy a single share of stock.

Invest in What You Know.

Moderately fast growers (20 to 25 percent) in nongrowth industries are ideal investments. • Look for companies with niches. • When purchasing depressed stocks in troubled companies, seek out the ones with the superior financial positions and avoid the ones with loads of bank debt. • Companies that have no debt can’t go bankrupt. • Managerial ability may be important, but it’s quite difficult to assess. Base your purchases on the company’s prospects, not on the president’s resume or speaking ability. • A lot of money can be made when a troubled company turns around. • Carefully consider the price-earnings ratio. If the stock is grossly overpriced, even if everything else goes right, you won’t make any money. • Find a story line to follow as a way of monitoring a company’s progress. • Look for companies that consistently buy back their own shares.

While catching up on the news is merely depressing to the citizen who has no stocks, it is a dangerous habit for the investor.

By putting your stocks into categories you’ll have a better idea of what to expect from them.

If you can follow only one bit of data, follow the earnings - assuming the company in question has earnings.

In fact, most great investors I know (Warren Buffett, for starters) are technophobes. They don’t own what they don’t understand, and neither do I.

I’m always on the lookout for great companies in lousy industries. A great industry that’s growing fast, such as computers or medical technology, attracts too much attention and too many competitors.

Never invest in any company before you’ve done the homework on the company’s earnings prospects, financial condition, competitive position, plans for expansion, and so forth.

If you don't understand a company, if you can't explain it to a ten-year-old in 2 minutes or less, don't own it.

Whenever you invest in any company, you’re looking for its market cap to rise. This can’t happen unless buyers are paying higher prices for the shares, making your investment more valuable.