Peter Lynch Quotes

installed central air conditioning, bought big refrigerator/

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

The p/e ratio can be thought of as the number of years it will take the company to earn back the amount of your initial investment — assuming, of course, that the company’s earnings stay constant.

This taught me not only that it’s difficult to predict markets, but also that small investors tend to be pessimistic and optimistic at precisely the wrong times, so it’s self-defeating to try to invest in good markets and get out of bad ones.

If you find a stock with little or no institutional ownership, you’ve found a potential winner. Find a company that no analyst has ever visited, or that no analyst would admit to knowing about, and you’ve got a double winner. When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm. It frequently happens with banks, savings-and-loans, and insurance companies, since there are thousands of these and Wall Street only keeps up with fifty to one hundred.

The offspring of immigrant factory workers had a chance to go to college and become doctors, lawyers, executives, and even owners of the very companies where their parents and grandparents worked long hours for low pay.

Remember, things are never clear until it’s too late.

If you’re considering a stock on the strength of some specific product that a company makes, the first thing to find out is: What effect will the success of the product have on the company’s bottom line?

You have to keep your priorities straight, if you plan to do well in stocks.

If you can’t figure out what category your stocks are in, then ask your broker. If a broker recommended the stocks in the first place, then you definitely ought to ask, because how else are you to know what you’re looking for? Are you looking for slow growth, fast growth, recession protection, a turnaround, a cyclical bounce, or assets?

It’s best to divide your money among three or four types of stock funds (growth, value, emerging growth, etc.) so you’ll always have some money invested in the most profitable sector of the market.

When looking at the same sky, people in mature industries see clouds where people in immature industries see pie.

There are five basic ways a company can increase earnings*: reduce costs; raise prices; expand into new markets; sell more of its product in the old markets; or revitalize, close, or otherwise dispose of a losing operation.

Houses, like stocks, are most likely to be profitable when they’re held for a long period of time. Unlike stocks, houses are likely to be owned by the same person for a number of years — seven, I think, is the average. Compare this to the

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