How to Invest Better Than Wall Street – Peter Lynch

Peter Lynch talks about how to invest better than professional investors on Wall Street. Lynch managed the legendary Fidelity Magellan Fund where he achieved annualized returns of nearly 30%. He is the author of several best-selling investing books including One Up On Wall Street.

Notes:

  • Philosophy was that find something that you identified with, then that is what you should invest in (100% correlation if the company earnings is doing well, then the company is going to do well)
  • People pay too much attention to external factors that don’t matter, too much money supply, who’s the president, ozone layer etc.…
  • These external factors are important, but you have no idea how they’re going to impact the company
  • If the head of the federal reserve can’t predict interest rates a year from now, how can we expect that we can predict it
  • People don’t use their natural abilities: if a person work in the restaurant industry, buy good restaurant stocks, not things they don’t understand like biotech
  • People think stocks are a gamble, short-term trades that earn them a buck or 2 in the short term, but probably lost more in commissions
  • If you can’t explain the company to a 10-year-old, don’t own it
  • Need to encourage people to put some money out in order to create jobs; which is the primary way to create new jobs in the economy