Peter Lynch Quotes

Debt is saving in reverse. The more it builds up, the worse off you are.

Know what you own, and know why you own it

In stage four, once again they’re crowded around me — but this time it’s to tell me what stocks I should buy. Even the dentist has three or four tips, and in the next few days I look up his recommendations in the newspaper and they’ve all gone up. When the neighbors tell me what to buy and then I wish I had taken their advice, it’s a sure sign that the market has reached a top and is due for a tumble.

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.

My diaries are full of such missed opportunities, but the stock market is merciful — it always gives the nincompoop a second chance.

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.

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

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.

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?

Once I’ve established the size of the company relative to others in a particular industry, next I place it into one of six general categories: slow growers, stalwarts, fast growers, cyclicals, asset plays, and turnarounds.

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.

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.

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

there was no longer an economic benefit in forcing people into a life of servitude.

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.