Peter Lynch Quotes

Here are some pointers from this section: • Understand the nature of the companies you own and the specific reasons for holding the stock. (“It is really going up!” doesn’t count.) • By putting your stocks into categories you’ll have a better idea of what to expect from them.

Peter Lynch doesn’t advise you to buy stock in your favorite store just because you like shopping in the store, nor should you buy stock in a manufacturer because it makes your favorite product or a restaurant because you like the food. Liking a store, a product, or a restaurant is a good reason to get interested in a company and put it on your research list, but it’s not enough of a reason to own the stock! 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 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.

A person who owns property and has a stake in the enterprise is likely to work harder and feel happier and do a better job than a person who doesn

Find something you enjoy doing and give it everything you've got, and the money will take care of itself.

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 by just sitting there, instead of checking the horse.

Understand the nature of the companies you own and the specific reasons for holding the stock. (“It is really going up!” doesn’t count.)

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

Stocks you trade, it's wives you're stuck with.

stick with a steady and consistent performer

The stock is selling at a p/e of 30, while the most optimistic projections of earnings growth are 15–20 percent for the next two years.

This is one of the keys to successful investing: focus on the companies, not on the stocks.

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.

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 more cash that builds up in the treasury, the greater the pressure to piss it away.