The 70 best phrases of Peter Lynch
Aug 11, 2022
Peter Lynch is known for being one of the most important entrepreneurs and investors in the United States, thanks to his work as manager of the Magellan fund at Fidelity Investments. He has shared his experience and his tips through his books on finance and investing.
To understand his way of thinking and understanding the world of investments and business, here we will review Peter Lynch's best quotes, commented.
- Related article: "190 wise phrases to reflect on life"
The most memorable Peter Lynch phrases
To find out how this man became an investment star in the hectic world of finance, we bring a compilation with the best phrases and reflections of Peter Lynch.
1. Know what you have and understand why you have it.
You can't have something without knowing the motives behind it.
2. Liking a product or a store is not a good enough reason to invest in its stock.
Investments are businesses and these are not driven by appearance.
3. The key to making money with stocks is not to be afraid of them.
The world of investments is a constant risk to win.
4. Behind every action there is a company. Find out what he does.
Every company can offer something interesting for you.
5. You can lose money in the short term, but you need the long term to make money.
It is unthinkable to pretend that you are going to make money from one day to the next when you invest.
- You may be interested: "How to increase the probability of success in my New Year's resolutions?"
6. It is important to learn that there is a company behind every stock and there is only one real reason why stocks go up.
Stocks rise when a company's quality becomes known.
7. If you don't analyze the companies, you have the same chance of success as a poker player betting without looking at the cards.
This is a business that needs a lot of time to study and get to know the company you want to bet on.
8. Although it is easy to forget, sometimes a participation is not a lottery ticket... that is partially owned by a business.
Many believe that entering the investment business is a fast ticket to becoming a millionaire.
9. The asset will continue to beat the market.
Talking about active actions versus passive ones.
10. If you don't understand a business, if you can't explain it to a ten year old in 2 minutes or less, don't own it.
Lynch's persistent advice is that we can't have a company we don't understand.
11. Investing in stocks is an art, not a science, and people who have been trained to rigidly quantify everything are at a huge disadvantage.
It is not about knowing entirely about numbers, but about knowing how to read the opportunities that come to you.
12. All the math you need in the stock market you get in fourth grade.
A reference to basic math being the only one really needed for trading.
13. Investors have lost far more money preparing for corrections, or trying to anticipate corrections, than has been lost on the corrections themselves.
Another thing to learn to read is about when it is necessary to withdraw.
14. The trick is not to learn to trust your instincts, but to discipline yourself to ignore them.
In this business what counts is to think with a cool and calm mind.
15. Never invest in an idea that you can't illustrate with a crayon.
The less you understand about a business, the less rewards you will have from it.
16. Most investors would be better off in an index fund.
Not all people who believe they are investors really are.
17. In actions, as in romance, the ease of divorce is not a solid basis for commitment.
To enter the world of actions, it is necessary to engage in the good and the bad.
18. It's human nature to keep doing something as long as it's enjoyable and you can be successful at it, which is why the world's population continues to double every 40 years.
Doing what we love is an almost primary objective, but we must also be careful not to let ourselves be carried away by greed.
19. Stocks are a safe bet, but only if you stay invested long enough to ride out corrections.
You have to think in the long term in investments, because there are no favorable results in the short term.
20. Never invest in a company without understanding its finances.
A mistake that seems to be made by many people interested in stocks.
21. Except in cases of big surprises, stocks are fairly predictable over twenty-year periods. As to whether they are going to go up or down in the next two or three years is the same as flipping a coin.
Another phrase that reminds us that this type of investment takes years to reap its rewards.
22. Remember, things are never clear until it's too late.
That is why it is so necessary to learn to analyze and anticipate.
23. Everyone has enough brains to make money in the stock market, but not everyone has enough stomach.
Many have the courage to start but not the courage to stay and wait.
- Related article: "160 motivational phrases to focus on success"
24. The best company to buy may be one that you already have in your portfolio.
For Lynch, familiarity can be an advantage.
25. If you spent more than thirteen minutes discussing economic and market forecasts, you wasted ten minutes.
Forecasts are often misleading.
26. If you like the store, you're probably going to like the action.
Investing also needs passion.
27. Time is on your side when you own shares of top companies.
A way to secure the future.
28. Just because you buy a stock and it goes up doesn't mean you're right. Just because you buy a stock and go down doesn't mean you're wrong.
The market is never static and that is why it is always in constant up and down.
29. People who are successful in the stock market also accept periodic losses, setbacks and unexpected events. Dire drops don't scare them out of the game.
To enter this world it is necessary to learn to accept failures, but especially to know how to learn from them.
30. Owning stocks is like having children: don't get involved with more than you can handle.
An interesting comparison.
31. The extravagance of any corporate office is directly proportional to the reluctance of management to reward shareholders.
As the saying goes, 'all that glitters is not gold'.
32. There is no shame in losing money on a stock. Everybody does it. What is embarrassing is holding on to a stock, or worse, buying more when the fundamentals are deteriorating.
You have to learn when to drop an action and walk away.
33. The person who flips the most stones wins the game. And that has always been my philosophy.
It is about knowing and putting into practice what has been learned.
34. No one can predict interest rates, the future direction of the economy, or the stock market. Throw away all those forecasts and focus on what's really happening to the companies you've invested in.
Forecasts are usually not correct, so you have to focus on the benefits offered by the company.
35. The biggest losses on the stock market come from companies with poor balance sheets.
Businesses that do not know how to properly manage their finances.
36. People don't have the patience to get rich slowly, so they decide to go bankrupt quickly.
Patience and consistency are the necessary tools to survive in this world.
37. The stock market is not like golf, in the stock market amateur investors can beat professionals.
Never be completely confident or insecure.
38. If the board is buying shares in their own company, you should do the same.
A smart move to copy.
39. In this business, if you're good, you're right six times out of ten. You're never going to get it right nine times out of ten.
Keep in mind that you are not going to win all the time.
40. The simpler it is, the more I like it.
Simple things are sometimes the best used.
41. Go for a business that any idiot can run, because sooner or later any idiot will probably run it.
It is necessary to cover all the possibilities that companies may go through.
42. Average investors can become experts in their own field and can pick winning stocks just as effectively as Wall Street professionals with just a little research.
Lynch insists that the most necessary thing is knowledge.
43. The biggest winners are surprises to me, and the acquisitions are even more surprising.
A result that does not occur as often as you think.
44. The Rule of 72 is helpful in determining how fast money will grow. He takes the annual return on any investment, expressed as a percentage, and divides it by 72. The result is the number of years it will take to double your money.
A very useful method to know where to go.
45. A stock market crash is as routine as a January snowstorm in Colorado.
The real falls, those where there is a risk of bankruptcy, do not happen with much eventuality.
- You may be interested: "The 3 most important rules of productivity (and their psychological keys)"
46. Often there is no correlation between the success of a company's operations and the success of its stock for a few months or even a few years.
Everything in business, whether small or large, needs time to see profit.
47. Companies go from poor performance to good or small ones grow to become big ones.
The growth of companies according to Lynch.
48. Hold your shares as long as the fundamental history of the company has not changed.
As long as everything stays on the same beat, it's fine.
49. If you are one of those who is likely to sell your entire portfolio in times of market panic, you better not invest in stocks.
The world of investments is not for anxious people.
50. If you are ready to invest in a company, then you should be able to explain why in simple language that a fifth grader can understand, and fast enough that the fifth grader doesn't bored.
If this is impossible, then this business is not for you.
51. Do not follow my steps, because even if you are right when buying, you will not know when to sell.
Lynch offers a basic guide, but each investor must find his own path.
52. It takes years, not months, to produce great results.
As already mentioned, it is a business whose fruits are seen after a long time.
53. If you're prepared, he can't hurt you. A crash is a great opportunity to take advantage of bargains left behind by investors fleeing the storm in panic.
A handy way to watch market declines.
54. In the long run, it's not just the amount of money you make that will determine your future prosperity. It's how much of that money you put to work by saving and investing it.
It is a process that is in continuous growth, recovery and investment.
55. Try to avoid buying hot stocks in industries that are trending.
The worst time to invest according to Lynch.
56. Not all investments are the same.
Because they are unique companies, every business is different.
57. When you sell desperate, you always sell cheap.
Worries make us take unhelpful impulsive actions.
58. Look on the street for companies that are succeeding and that you consider their products to be wonderful. With this technique you can discover excellent investment opportunities long before the professionals.
A very wise and controlled way of listening to our instincts.
59. That's not to say there isn't an overvalued market, but there's no point in worrying about it.
Like everything, there are overvalued brands that do not need more attention.
60. You have recessions, you have stock market crashes. If you don't understand what's going to happen, then you're not ready, you're not going to do well in the markets.
In the market one day you can be up and the other down.
61. Big companies have small moves, small companies have big moves.
Never underestimate the power of companies because of their size.
62. All the time and effort that people put into choosing the right fund, the hot hand, the great manager, in most cases, has not resulted in any advantage.
It is difficult for there to be letters in favor of an investor, only information that can be used.
63. When people discover that they are not good at picking stocks, they are likely to continue to do so anyway.
Not everyone has the ability to be a good investor.
64. Don't hold more stocks than you can stay informed of.
It is better to have few stocks that are known inside out.
65. My method for choosing stocks has never changed. When companies go from being bad to being half bad, there is money to be made.
It's about knowing how to seize the right opportunity.
66. There is no such thing as a worry-free investment. The trick is to separate the valid concerns from the idle ones and then check them against the facts.
There will always be a certain degree of anxiety because they are risky bets, that is why it is necessary to learn to control ourselves.
- Related article: "Why does fear block me and prevent me from making decisions?"
67. The born investor is a myth.
The investor is a person who is created after many studies and knowledge of the market.
68. You can't see the future using the rear view mirror.
Even in this type of business, the most important thing is to move forward.
69. You just need a few good deeds in your life. I mean, how many times do you need a stock to multiply tenfold to make a lot of money? Not much.
It is better to concentrate on a few things to do them well, than to have thousands of shares and leave half for nothing.
70. Invest in stocks before any other asset.
A piece of advice on where we should focus our money.