Peter Lynch Quotes

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

Only invest what you could afford to lose without that loss having any effect on your daily life in forseable future.

developed a passion for making ten times my money early in my investing career.

Although it’s easy to forget sometimes, a share of stock is not a lottery ticket. It’s part ownership of a business.

No wonder people make money in the real estate market and lose money in the stock market. They spend months choosing their houses, and minutes choosing their stocks. In fact, they spend more time shopping for a good microwave oven than shopping for a good investment.

share of stock is not a lottery ticket. It’s part ownership of a business.

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.

"The old Wall Street adage "never invest in anything that eats or needs repairs" may apply to racehorses, but it's mlarkey when it comes to houses."

A decline in stocks is not a surprising event, it’s a recurring event — as normal as frigid air in Minnesota. If you live in a cold climate, you expect freezing temperatures, so when your outdoor thermometer drops below zero, you don’t think of this as the beginning of the next Ice Age. You put on your parka, throw salt on the walk, and remind yourself that by summertime it will be warm outside. A successful stockpicker has the same relationship with a drop in the market as a Minnesotan has with freezing weather. You know it’s coming, and you’re ready to ride it out, and when your favorite stocks go down with the rest, you jump at the chance to buy more.

Corporate profits are up fifty-five-fold since World War II, and the stock market is up sixtyfold. Four wars, nine recessions, eight presidents, and one impeachment didn’t change that.

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.

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.

One obvious sell signal is that inventories are building up and the company can’t get rid of them, which means lower prices and lower profits down the road. I always pay attention to rising inventories. When the parking lot is full of ingots, it’s certainly time to sell the cyclical. In fact, you may be a little late.

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

By now you might be wondering what’s the point of investing in a stodgy old company such as IBM, GM, or U.S. Steel? There are several reasons you might do this. First, big companies are less risky, in that they generally are in no danger of going out of business. Second, they are likely to pay a dividend. Third, they have valuable assets that might be sold off at a profit.