Peter Lynch Lecture on Investing

Peter Lynch managed the Magellan Fund at Fidelity Investments between 1977 averaging a 29.2% annual return, consistently more than doubling the S&P 500 stock market index and making it the best-performing mutual fund in the world. During his 13 year tenure, assets under management increased from $18 million to $14 billion.

Notes from this talk below. You can download the transcript here.

The single most important thing is to know what you own. Why do you own the stock?

Many people only own a stock because they think it might go up… If you can’t explain to a 10 year old in 2 minutes or less why you own a stock - then you shouldn’t own it.

Do your research, understand the company. There is a method to investing and there are reasons why stocks go up. Stocks are not lottery tickets, there is a company behind the stock. If the company does well, the stock does well.

You cannot predict interest rates or the market.

Study history and understand the market goes up and it goes down. There will be a market correction or period of time where everyone will lose a lot of money.

You can take advantage of volatility in the market if you understand what you own.

You have plenty of time.

People are always in a rush to buy a particular stock. You can make money buying a stock years after its IPO. Don’t be too quick to buy a stock before you have done the research on the company behind the stock. 

You only need a few good stocks in your lifetime. Pick a few good stocks every decade in an industry you understand.

It’s always going to be scary, there’s always something to worry about. You have to cut it all out. Own good companies, they’ll turn around, study them and you’ll do well.