Lynch said, “If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes.” It wasn’t that he didn’t understand the importance of these big-picture elements, he just did not believe that it is possible to consistently forecast them in any bankable way. He did not focus on the direction of the market, the economy or interest rates. Lynch was a bottom-up stock-picker who looked for good companies selling at attractive prices. Stocks Passing the Lynch Screen (Ranked by Dividend-Adjusted PEG Ratio)Īmerican Association of Individual Investors Fifteen Lynch-inspired prospects are presented below. Lynch warned investors “when you sell in desperation, you always sell cheap.”ĪAII has developed a quantitative stock filter, or stock screen, with the goal of identifying stocks possessing the fundamental characteristics Lynch looks for when selecting stocks. As Lynch pointed out, stocks will go up and down, and rather than panic when they go down, you must have detachment to stay the course. Recent stock market volatility reminds us that long-term stock market success requires a certain detachment and tolerance for short-term pain.
#PETER LYNCH ONE UP ON WALL STREET RETURNS PROFESSIONAL#
Instead, Lynch strongly believed that individuals could not only succeed at investing, but they also had a distinct advantage over Wall Street and professional money managers by being able to identify trends early, investing in what they know, having the flexibility to invest in a wide array of companies and not being evaluated on a short-term basis. You would think that one of the top professional investors who earned his keep by managing other people’s money would try to dissuade individual investors from even trying to pick stocks.