Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business.
Don't bottom fish.
Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.
I don't go near the money and the money doesn't go near me.
I think you have to learn that there's a company
behind every stock, and that there's only one real reason why stocks go
up. Companies go from doing poorly to doing well or small companies grow
to large companies.
I've found that when the market's going down and you
buy funds wisely, at some point in the future you will be happy. You
won't get there by reading 'Now is the time to buy.'
If all the economists in the world were laid end to end, it wouldn't be a bad thing.
Improved turnout will give parliament and government the appearance of being more legitimate.
Peter Lynch
It's human nature to keep doing something as long as
it's pleasurable and you can succeed at it - which is why the world
population continues to double every 40 years.
Suicide is a permanent solution to a temporary
problem. Suicide is a choice and I think if we work with that with kids,
we'll get somewhere.
The person that turns over the most rocks wins the game. And that's always been my philosophy.
When stocks are attractive, you buy them. Sure, they
can go lower. I've bought stocks at $12 that went to $2, but then they
later went to $30. You just don't know when you can find the bottom.
You get recessions, you have stock market declines.
If you don't understand that's going to happen, then you're not ready,
you won't do well in the markets.
Here are 51 pearls of wisdom from one of the greatest investing minds of our time:
1. In stocks as in romance, ease of divorce is not a sound basis for commitment.
2. The key to making money in stocks is not to get scared out of them.
3. 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 the fifth grader won't get bored.
4. There's no shame in losing money on a stock. Everybody does it. What
is shameful is to hold on to a stock, or worse, to buy more of it when
the fundamentals are deteriorating.
5. In business, competition is never as healthy as total domination.
6. Your investor's edge is not something you get from Wall Street
experts. It's something you already have. You can outperform the experts
if you use your edge by investing in companies or industries you
already understand.
7. Behind every stock is a company. Find out what it's doing.
8. Owning stocks is like having children -- don't get involved with more than you can handle.
9. If you can't find any companies that you think are attractive, put your money in the bank until you discover some.
10. If you don't study any companies, you have the same success
buying stocks as you do in a poker game if you bet without looking at
your cards.
11. Time is on your side when you own shares of superior companies.
12. Average investors can become experts in their own field and can pick
winning stocks as effectively as Wall Street professionals by doing
just a little research.
13. In the long run, a portfolio of well chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds
or a money-market account. In the long run, a portfolio of poorly
chosen stocks won't outperform the money left under the mattress.
14. You have to keep your priorities straight if you plan to do well in stocks.
15. When you start to confuse Freddie Mac, Sallie Mae and Fannie Mae
with members of your family, and you remember 2,000 stock symbols but
forget the children's birthdays, there's a good chance you've become too
wrapped up in your work.
16. If you're lucky enough to have been rewarded in life to the degree
that I have, there comes a point at which you have to decide whether to
become a slave to your net worth by devoting the rest of your life to increasing it or to let what you've accumulated begin to serve you.
17. The worst thing you can do is invest in companies you know nothing
about. Unfortunately, buying stocks on ignorance is still a popular
American pastime.
18. I'm always fully invested. It's a great feeling to be caught with your pants up.
19. The basic story remains simple and never-ending. Stocks aren't lottery tickets. There's a company attached to every share.
20. Never invest in any idea you can't illustrate with a crayon.
21. Know what you own, and know why you own it.
22. In this business, if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.
23. It's human nature to keep doing something as long as it's
pleasurable and you can succeed at it, which is why the world population
continues to double every 40 years.
24. The person that turns over the most rocks wins the game. And that's always been my philosophy.
25. People who want to know how stocks fared on any given day ask,
"Where did the Dow close?" I'm more interested in how many stocks went
up versus how many went down. These so-called advance/decline numbers
paint a more realistic picture.
26. My high-tech aversion caused me to make fun of the typical biotech
enterprise: $100 million in cash from selling shares, one hundred
Ph.D.'s, 99 microscopes, and zero revenues.
27. It would be wonderful if we could avoid the setbacks with timely exits, but nobody has figured out how to predict them.
28. When people discover they are no good at baseball or hockey, they
put away their bats and their skates and they take up amateur golf or
stamp collecting or gardening. But when people discover they are no good
at picking stocks, they are likely to continue to do it anyway.
29. That's not to say there's no such thing as an overvalued market, but there's no point worrying about it.
30. You can find good reasons to scuttle your equities in every morning paper and on every broadcast of the nightly news.
31. Equity mutual funds are the perfect solution for people who want to own stocks without doing their own research.
32. If you hope to have more money tomorrow than you have today, you've
got to put a chunk of your assets into stocks. Sooner or later, a
portfolio of stocks or stock mutual funds will turn out to be a lot more
valuable than a portfolio of bonds or CDs or money-market funds.
33. Gentlemen who prefer bonds don't know what they're missing.
34. The typical big winner in the Lynch portfolio generally takes three to ten years to play out.
35. If you can follow only one bit of data, follow the earnings
-- assuming the company in question has earnings. I subscribe to the
crusty notion that sooner or later earnings make or break an investment
in equities. What the stock price does today, tomorrow, or next week is
only a distraction.
36. During the Gold Rush, most would-be miners lost money, but people
who sold them picks, shovels, tents and blue-jeans (Levi Strauss) made a
nice profit.
37. 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.
38. Long-term investing has gotten so popular, it’s easier to admit
you’re a crack addict than to admit you’re a short-term investor.
39. I talk to hundreds of companies a year and spend hour after hour in
heady pow-wows with CEOs, financial analysts and my colleagues in the
mutual-fund business, but I stumble onto the big winners in
extracurricular situations, the same way you do.
40. Visiting stores and testing products is one of the critical elements of the analyst’s job.
41. There seems to be an unwritten rule on Wall Street: If you don’t
understand it, then put your life savings into it. Shun the enterprise
around the corner, which can at least be observed, and seek out the one
that manufactures an incomprehensible product.
42. As I look back on it now, it’s obvious that studying history and
philosophy was much better preparation for the stock market than, say,
studying statistics.
43. Investing in stocks is an art, not a science, and people who’ve been
trained to rigidly quantify everything have a big disadvantage.
44. All the math you need in the stock market you get in the fourth grade.
45. The junior high schools and high schools of America have forgotten
to teach one of the most important courses of all. Investing.
46. In our society, it's been the men who've handled most of the
finances, and the women who've stood by and watched men botch things up.
47. The natural-born investor is a myth.
48. In the long run, it's not just how much money you make that will
determine your future prosperity. It's how much of that money you put to
work by saving it and investing it.
49. Imagine if you borrowed your parents' car without permission and ran
it into a tree, how much better you'd fell if you were incorporated.
50. If a picture is worth a thousand words, in business, so is a number.
51. The simpler it is, the better I like it.
• “The typical big winner in the Lynch portfolio generally takes three to ten years to play out”
•
“If you can follow only one bit of data, follow the earnings---
assuming the company in question has earnings. As you’ll see in this
text, I subscribe to the crusty notion that sooner or later earnings
make or break an investment in equities. What the stock price does
today, tomorrow, or next week is only a distraction.”
•
“During the Gold Rush, most would-be miners lost money, but people who
sold them picks, shovels, tents, and blue-jeans (Levi Strauss) made a
nice profit. Today, you can look for non-internet companies that
indirectly benefit from Internet traffic (package delivery is an obvious
example); or you can invest in manufacturers of switches and related
gizmos that keep the traffic moving.”
• “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.”
• “Long-term investing has gotten so
popular, it’s easier to admit you’re a crack addict than to admit you’re
a short-term investor.”
• As a very successful
investor once said: “the bearish argument always sounds more
intelligent.” You can find good reasons to scuttle away our equities in
every morning paper and on every broadcast of the nightly news.”
•
“You might have assumed it’s the sophisticated and high-level gossip
that experts hear around the Quotron machines that gives us our best
investment ideas, but I get many of mine the way the fireman got his. I
talk to hundreds of companies a year and spend hour after hour in heady
powwows with CEO’s, financial analysts, and my colleagues in the
mutual-fund business, but I stumble onto the big winners in
extracurricular situations, the same way you do.”
• “Visiting stores and testing products is one of the critical elements of the analyst’s job”
•
“There seems to be an unwritten rule on Wall Street: If you don’t
understand it, then put your life savings into it. Shun the enterprise
around the corner, which can at least be observed, and seek out the one
that manufactures an incomprehensible product.”
• “As I
look back on it now, it’s obvious that studying history and philosophy
was much better preparation for the stock market than, say, studying
statistics. Investing in stocks is an art, not a science, and people
who’ve been trained to rigidly quantify everything have a big
disadvantage. If stockpicking could be quantified, you could rent time
on the nearest Cray computer and make a fortune. But it doesn’t work
that way. All the math you need in the stock market you get in the
fourth grade.”
• “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.
When somebody says, “any idiot could run this joint,” that’s a plus as
far as I’m concerned, because sooner or later any idiot probably is
going to be running it.”
• “You can get tenbaggers in companies that have already proven themselves. When in doubt, tune in later.”