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Peter Lynch Quotes from "One Up On Wall Street"

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April 06, 2010 – Comments (3)

I think to become an investing master, you must study the masters and Peter Lynch is undoubtedly in that class. Because he is one of my favorite investors, I recently re-read one of his books "One Up On Wall Street" and wrote down some of my favorite quotes below. Enjoy!


• “The typical big winner in the Lynch portfolio generally takes three to ten years to play out”
• “If you can follow only one bit of data, follow the earnings--- assuming the company in question has earnings. As you’ll see in this text, I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction.”
• “During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents, and blue-jeans (Levi Strauss) made a nice profit. Today, you can look for non-internet companies that indirectly benefit from Internet traffic (package delivery is an obvious example); or you can invest in manufacturers of switches and related gizmos that keep the traffic moving.”
• “All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.”
• “Long-term investing has gotten so popular, it’s easier to admit you’re a crack addict than to admit you’re a short-term investor.”
• As a very successful investor once said: “the bearish argument always sounds more intelligent.” You can find good reasons to scuttle away our equities in every morning paper and on every broadcast of the nightly news.”
• “You might have assumed it’s the sophisticated and high-level gossip that experts hear around the Quotron machines that gives us our best investment ideas, but I get many of mine the way the fireman got his. I talk to hundreds of companies a year and spend hour after hour in heady powwows with CEO’s, financial analysts, and my colleagues in the mutual-fund business, but I stumble onto the big winners in extracurricular situations, the same way you do.”
• “Visiting stores and testing products is one of the critical elements of the analyst’s job”
• “There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it. Shun the enterprise around the corner, which can at least be observed, and seek out the one that manufactures an incomprehensible product.”
• “As I look back on it now, it’s obvious that studying history and philosophy was much better preparation for the stock market than, say, studying statistics. Investing in stocks is an art, not a science, and people who’ve been trained to rigidly quantify everything have a big disadvantage. If stockpicking could be quantified, you could rent time on the nearest Cray computer and make a fortune. But it doesn’t work that way. All the math you need in the stock market you get in the fourth grade.”
• “Getting the story on a company is a lot easier if you understand the basic business. That’s why I’d rather invest in panty hose than in communication satellites, or in motel chains than in fiber optics. The simpler it is, the better I like it. When somebody says, “any idiot could run this joint,” that’s a plus as far as I’m concerned, because sooner or later any idiot probably is going to be running it.”
• “You can get tenbaggers in companies that have already proven themselves. When in doubt, tune in later.”


-TMFConnor

3 Comments – Post Your Own

#1) On April 06, 2010 at 1:36 PM, ShadowEquities (< 20) wrote:

You stole my idea!  :-)  I'm a big Peter Lynch backer and was planning on compiling a list of his quotes from his book as well.  Good post.  Lots of valuable lessons learned for the individual investor in his books.

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#2) On April 06, 2010 at 1:39 PM, lemoneater (80.70) wrote:

I liked the statement about studying history and philosophy to prepare one for the stock market.  

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#3) On April 06, 2010 at 1:52 PM, catoismymotor (< 20) wrote:

This book is my second favorite in the subject of investing, behind the Intelligent Investor by B. Graham.

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