Wednesday, December 24, 2014

Peter Lynch

[6/18/15] 20 Golden Rules

[12/24/14] Stocks to avoid.

[12/24/14] The Perfect Stock

[5/19/14] Picking Stocks Like Peter Lynch (1:10:06 video from gurufocus)

[4/2/14] The Peter Lynch Portfolio 29 (only $79/year from gurufocus)

[6/7/09] Peter Lynch videos (John Templeton and Louis Rukeyser too)

[8/27/07] On market timing: ""I don't remember anybody predicting the market right more than once, and they predict a lot," Lynch said in a PBS interview several years ago. He also likened investing in stocks with a one- or two-year horizon to "betting on red or black at the casino," adding, "What the market's going to do in one or two years, you don't know. Time is on your side in the stock market."

Asked in that same PBS interview whether average investors should follow a "buy-and-hold" strategy, Lynch responded, "They should buy, hold and when the market goes down, add to it. Every time the market goes down 10%, you add to it, [and] you would have better returns than the average of 11%, if you believe in it, if it's money you're not worried about [in the short term]."<! forbes article via russ ->

[8/22/06] Since I am looking at this review of Beating the Street, I figured I'd collect some of the other links to Lynch sprinkled among this blog.

The Wit and Wisdom of Peter Lynch

The different kinds of companies

The Peter Lynch approach to 'Understandable' Stocks

Peters's 21 Principals

Fast grower or low p/e?

Don't invest like Peter Lynch

[9/6/06] Review of One Up on Wall Street

[9/26/06 from mia notes from 3/31/01] Perhaps the most important thing I've learned from Peter Lynch is (to paraphrase) if the earnings keeps growing, the price will eventually follow. ... I'm trying to look up the exact quote and the closest I could come is this paragraph from One Up On Wall Street, Chapter Ten entitled Earnings, Earnings, Earnings:
... it always comes to down to earnings and assets. Especially earnings. Sometimes it takes years for the stock price to catch up to a company's value, and the down periods last so long that investors begin to doubt that will ever happen. But value always win out ...
I'm now looking at the April 1999 Worth and Lynch is featured in an ad for Fidelity Aggressive Growth. Here's his quote,
Despite 9 recessions since WWII, the stock market's up 63-fold because earnings are up 54-fold. Earnings drive the market.
[My question isn't why the correlation, but why the disparity? At first it seems way off because I thought 55-fold would be double of 54-fold. But actually 108-fold is. 63-fold is only 17% higher than 54-fold.]

Here's some more from the Legg Mason Semi-Annual report (6/30/05). Stocks rise with earnings. "Stock prices are highly positive correlated (over 0.90) with the direction of profits, not their rate of group."]

[2/11/13] Here's another similar quote from One Up On Wall Street

"You can see the importance of earnings on any chart that has an earnings line running alongside the stock price. On chart after chart the two lines will move in tandem, or if the stock price strays away from the earnings line, sooner or later it will come back to the earnings." Peter Lynch - 'One Up On Wall Street”

On the other hand, Keith Wibel observes that "Over 10-year periods, the major determinant of stock-price returns isn't growth in corporate profits, but rather changes in price-earnings multiples. The bull market of the 1980s represented a period when multiples in the stock market doubled- then they doubled again in the 1990s. Though earnings of the underlying businesses climbed about 6% per year, stock prices appreciated nearly 14% annually."

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