Peter Lynch

Peter Lynch (born January 19, 1944) is a successful Wall Street investor, and arguably one of the best stock-pickers in the world. He is currently a president at Fidelity Investments.

Books

After he retired he wrote two popular books on stock picking, Beating the Street (ISBN 0671891634) in 1994 and One Up on Wall Street (ISBN 0743200403) in 1989. Both are considered required reading for any serious investor.

Related Topics:
1994 - 1989

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Investment terminology

Lynch coined some of the best known mantras of modern individual investing strategies.

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His most famous investment principle is simply, "Invest in what you know," popularizing the economic concept of "local knowledge". This simple principle resonates well with average non-professional investors who don't have time to learn complicated quantitative stock measures or read lengthy financial reports. Since most people tend to become expert in certain fields, applying this basic "invest in what you know" principle helps individual investors find good undervalued stocks.

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Lynch uses this principle as a starting point for investors. He has also often said that the individual investor is more capable of making money from stocks than a fund manager, because they are able to spot good investments in their day-to-day lives before Wall Street becomes aware of them. Lynch understands this concept well. Throughout his two classic investment primers, he has outlined many of the great investments he found when not in his office - he found them when he was out with his family, driving around or making a purchase at the mall. Lynch believes the individual investor is able to do this, too.

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He also coined the phrase "ten bagger" in a financial context. This refers to an investment which is worth ten times its original purchase price and comes from baseball where "bags" or "bases" that a runner reaches are the measure of the success of a play. A "two bagger" would be a double, so by extension, two home runs and a double would bed a "ten bagger".

Related Topics:
Ten bagger - Baseball - Double - Home run

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