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