Lynch has said that "absent a lot of surprises, stocks are relatively predictable over 10-20 years. As to whether they're going to be higher or lower in two or three years, you might as well flip a coin to decide."
The key to making money in stocks is not to get scared out of them.
I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.
You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets.
Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.
Never fall in love with a stock; always have an open mind.
The bond market is dominated by conservative investors who keep rather close tabs on a company's ability to repay the principal. Since bonds come before stocks in the lineup of claimants on the company's assets, you can be sure that when bonds sell for next to nothing, the stock will be worth even less. Here's a tip from experience: before you invest in a low-priced stock in a shaky company, look at what's been happening to the price of the bonds.
Visiting stores and testing products/services is one of the critical elements of analysts’ job.
Hottest stocks in the hottest industries are better avoided. Probably, they are too expensive deals.
Book value in Balance Sheet could be quite deceptive – Debt is real number and assets may be worth less than the amount they appear for in balance sheet.
It takes years, not months, to produce big results.
Source: Investopedia, other resources
The key to making money in stocks is not to get scared out of them.
I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.
You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets.
Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.
Never fall in love with a stock; always have an open mind.
The bond market is dominated by conservative investors who keep rather close tabs on a company's ability to repay the principal. Since bonds come before stocks in the lineup of claimants on the company's assets, you can be sure that when bonds sell for next to nothing, the stock will be worth even less. Here's a tip from experience: before you invest in a low-priced stock in a shaky company, look at what's been happening to the price of the bonds.
Visiting stores and testing products/services is one of the critical elements of analysts’ job.
Hottest stocks in the hottest industries are better avoided. Probably, they are too expensive deals.
Book value in Balance Sheet could be quite deceptive – Debt is real number and assets may be worth less than the amount they appear for in balance sheet.
It takes years, not months, to produce big results.
Source: Investopedia, other resources
Peter Lynch categories | |
Slow growers | Very large corporations |
Stalwarts | Large corporations with strong pedigree |
Fast growers | small, aggressive, new entrants growing at 20-25% per annum |
Recession protection | Education, Medical, etc |
Turnarounds | |
Cyclicals | |
Asset plays | |
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