In this week’s episode, Preston and Stig discuss what they learned from reading legendary investor Peter Lynch’s book, One Up On Wall Street. Lynch gained his fame as the manager of the Magellan Fund at Fidelity Investments from 1977 through 1990. During this time, he grew his fund from only $18 million to $14 billion. When looking at this growth from a annual perspective, Lynch produced a 29.2% return each year. This ended-up as the best 20 year return of any mutual fund ever recorded.
Lynch has written numerous books, but One Up On Wall Street was one of the top selling books of its time. One of the reasons the book became so famous was due to Lynch’s writing style. He keeps things simple to understand and doesn’t drown the reader in fancy terminology. Lynch is famous for teaching people to invest in what they know and understand. This is a similar concept to one of Warren Buffett’s four rules to investing as well. Lynch is also famous for saying that, “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in the corrections themselves.” This was his simple way of saying: Don’t time the market. If you would like to read our chapter by chapter summary of Lynch’s book, One Up On Wall Street, be sure to follow the link for our free summary.
In this episode, you’ll learn:
- If new investors should build their portfolio around small cap stocks.
- Why there is more to it than just picking companies you understand
- How to identify a stock pick that has pricing power.
- A rather untraditional approach to identifying good stocks.
- Ask The Investors: Should a value investor invest in net-net stocks?
Books and Resources Mentioned in this Podcast
Peter Lynch’s book: One Up On Wall Street – Read Reviews for this book
Peter Lynch’s book: Beating The Street – Read Reviews for this book
Tobias Carlisle’s book: Deep Value – Read Reviews for this book
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