When we want to learn or start in a subject that we had never touched before or very little, the most advisable thing is to inform ourselves, study and look at famous people in that field. In the world of economics it is the same. Great investors and economists have a lot of advice to pass on to us, so it never hurts to read us their wisdoms, such as the phrases of Peter Lynch.
Finances are very complex and risky when it comes to investing. Because of that we should soak up everything we can well before exposing our money without knowing what we are doing. For this reason we have dedicated this article to the phrases of Peter Lynch. In addition, we will talk a little about who this famous economist is and what his investment philosophy is.
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The 17 best phrases of Peter Lynch
It is to be expected that, during so many years of career in the financial world, Peter Lynch has accumulated a large number of phrases that they can serve as a guide for all those who decide to start in international markets. Next we will see a list of the 17 best phrases of Peter Lynch:
- "The key to making money from stocks is not to be afraid of them."
- "You can lose money in the short term, but you need the long term to make money."
- “It is important to learn that there is a company behind every stock, and there is only one real reason why stocks go up. Companies go from bad to good performance, or small ones grow to become big. "
- "If you don't analyze the companies, you have the same chances of success as a poker player betting without looking at the cards."
- Investing is an art, not a science. People who tend to rigidly quantify everything are at a disadvantage. "
- "Never invest in an idea that you cannot illustrate with a pencil."
- "The best company to buy may be one that you already have in your portfolio."
- Except in cases of big surprises, the actions are quite predictable in periods of twenty years. As for whether they're going to go up or down in the next two or three years, it's the same as tossing a coin. "
- “If you spent more than thirteen minutes discussing market and economic forecasts, you wasted ten minutes.
- "If you like the store, you're probably going to like the action."
- Invest in things you understand.
- "Never invest in a company without first knowing its financial statements."
- «In the long term, the correlation between the operational success of a company and its success on the stock market is 100%. This disparity is the key to making money. "
- "If the board is buying shares in its own company, you should do the same."
- "Not all investments are the same."
- "Invest in stocks before any other asset."
- "You can't see the future using the rear view mirror."
Who is Peter Lynch?
In order to understand Peter Lynch's phrases well, we must know who this great economist is and what his investment philosophy is. At the moment is one of the most recognized and valued asset managers professions worldwide. He is in charge of the Fidelity Magellan fund, which stands out for having obtained an annual return of 29% during the years 1977 to 1990, 23 years in total. For this reason, Lynch is considered one of the most successful fund managers in all of history. In addition, he is the author of several publications and books dealing with investment strategies and markets.
How does Peter Lynch invest?
Peter Lynch's most popular investment principle is local knowledge, that is, investing in what is known. Since most people tend to specialize in a few specific areas, applying this very basic concept helps investors find good and undervalued stocks. The ideas highlighted by this great economist are Invest in companies with little debt, whose profits are in a growth phase and whose shares are below their real value. This is reflected in some phrases by Peter Lynch.
For Lynch, this principle represents the starting point for every investment. In addition, on several occasions he has commented that, according to him, an individual investor has a better chance of success and of making money than a fund manager. This is because you are more likely to find good investment opportunities in your everyday life.
As for other investment philosophies, Peter Lynch has repeatedly criticized the so-called market timing. It is about the attempt to predict future prices. According to him, "Much more money has been lost trying to anticipate a market correction than the correction itself." Although it does not appear in our list of the best Peter Lynch phrases, it is undoubtedly a great reflection to make.
I hope these Peter Lynch quotes have been of help and inspiration to you. They are good advice and reflections, especially if we are new to the world of finance.