Peter Lynch

Beating the Street
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"The best stock to buy may be the one you already own."

"Buying stock in utility companies is good because it gives you a higher dividend,but you'll make money in growth stocks.

Never invest in any idea you can't illustrate with a crayon.

"I try to stress the idea that a portfolio should have at least ten companies, with one or two providing a fairly good dividend... they have to explain what the company does. If they can't tell the class the service it provides or the products it makes, then they aren't allowed to buy."

"Over the last seventy years the market has declined forty times, so an investor has to be willing to be in the market for the long term."

"When the first shopping malls were built, Sears was in ninety-five percent of them... Now when I invest in a stock, I'll know to invest in a company that has room to grow."

"A good company usually increases its dividend every year."

"You can lose money in a very short time but it takes a long time to make money"

"The stock market really isn't a gamble, as long as you pick good companies that you think will do well, and not just because of the stock price."

"You can make a lot of money from the stock market, but then again you can also lose money, as we proved."

"You have to research the company before you put your money into it."

"When you invest in the stock market you should always diversify."

"You should invest in several stocks because out of every five you pick, one will be very great, one will be really bad, and three will be OK."

"Never fall in love with a stock; always have an open mind."

"You shouldn't just pick a stock - you should do your homework."

"Just because a stock goes down doesn't mean it can't go lower."

"Over the long term, it's better to buy stocks in small companies."

"You should not buy a stock because it's cheap but because you know a lot about it."

"Hold no more stocks than you can remained informed on."

"Invest regularly."

"You want to see, first, that sales and earnings per share are moving forward at an acceptable rate and, second, that you can buy the stock at a reasonable price."

"Buy or do not buy the stock on the basis of whether or not growth meets your objectives and whether the price is reasonable."

"The dividend is such an important factor in the success of many stocks that you could hardly go wrong by making an entire portfolio of companies that have raised their dividends for 10 or 20 years in a row."

"The extravagance of any corporate office is directly proportional to management's reluctance to reward the shareholders."

"I was attracted to fast-food restaurants because they were so easy to understand. A restaurant chain that succeeded in one region had an excellent chance of duplicating its success in another."

"I always ended these discussions by asking: which of your competitors do you respect the most?"

"I always look for banks that have a strong local deposit base, and are efficient and careful commercial lenders."

"90 seconds is plenty of time to tell the story of a stock. If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so that fifth grader won't get bored."

"Bargains are the holy grail of the true stockpicker. The fact the 10 to 30 percent of our net worth is lost in a market sell-off is of little consequence. We see the latest correction not as a disaster but as an opportunity to acquire more shares at low prices. This is how great fortunes are made over time."

"Once you've bought a stock, presumably you've learned something about the industry and the company's place within it, how it behaves in recessions, what factors affect the earnings, etc. Inevitably, some gloomy scenario will cause a general retreat in the stock market, your old favorites will once again become bargains, and you can add to your investment."

"If you like the store, chance are you'll like the stock."

"The very homogeneity of taste in food and fashion that makes for a dull culture also makes fortunes for owners of retail companies and of restaurant companies as well. What sells in one town is almost guaranteed to sell in another."

"As long as the same-store sales are on the increase, the company is not crippled by excessive debt, and it is following its expansion plans as described in its reports, it usually pays to stick with the stock."

"When an industry gets too popular, nobody makes money there anymore... In business, competition is never as healthy as total domination. The greatest companies in lousy industries share certain characteristics. They are low-cost operators, and penny-pinchers in the executive suite. They avoid going into debt. They reject the corporate caste system that creates white-collar Brahmins and blue-collar untouchables. Their workers are well paid and have a stake in the companies' future. They find niches, part of the market that bigger companies have overlooked. They grow fast - faster than many companies in the fashionable fast-growth industries."

“The typical big winner in the Lynch portfolio generally takes three to ten years to play out”

“All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.”

“Visiting stores and testing products is one of the critical elements of the analyst’s job”

“Getting the story on a company is a lot easier if you understand the basic business. That’s why I’d rather invest in panty hose than in communication satellites, or in motel chains than in fiber optics. The simpler it is, the better I like it.”

“You can get tenbaggers in companies that have already proven themselves. When in doubt, tune in later.”