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Great Investor- Peter Lynch

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oneuppeterlynchIn learning how to best to invest, we can look at some of the strategies of some of the best investors out there.

I have heard of Peter Lynch for a while now and flipped through his books in the local bookstore. But over the break, I have been reading two of his books, One up on Wall Street: How to Use What You Already Know to Make Money in the Market and Learn to Earn: A Beginner's Guide to the Basics of Investing and Business.

From the books, you can learn about his investing methodologies and why he is rated as one of the best investor ever.

He has a simple checklist that everyone can follow here:

  • Know what you own.
  • It's useless to predict the economy and interest rates.
  • Identify and recognize exceptional companies from observation and what you buy and use
  • Good management is very important  but a simple business that an idiot can run is even better
  • Be flexible and humble, and learn from mistakes. (think that is why he bought into so many companies even though his mentor asked him to stick to a few companies in the fund he managed)
  • Before you make a purchase, you should be able to explain why you're buying.

Both of his books are easy to read and the newbie investor or experienced investor can learn from one of the legends of investment. He writes and explains what he does in simple terms that everyone can understand.

For example, "I’d already heard about Toys “R” Us from my friend Peter deRoetth, but one trip to the nearest local outlet convinced me that this company knew how to sell toys. If you asked customers if they liked the place, they all seemed to say that they planned to come back.”

 

When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30. You just don't know when you can find the bottom.


Peter Lynch

Who is the investor you admire most?

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1 comments:
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Musicwhiz said...
January 14, 2010 at 12:07 PM  

Warren Buffett, Benjamin Graham, Phil Fisher, Peter Lynch and John Templeton, to name a few.

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