Top 138 Quotes & Sayings by Peter Lynch - Page 2

Behind every stock is a company. Find out what it's doing.

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.

Charts are great for predicting the past.

A stock market decline is as routine as a January blizzard in Colorado. If you're prepared, it can't hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.

I've always said, the key organ here isn't the brain, it's the stomach. When things start to decline - there are bad headlines in the papers and on television - will you have the stomach for the market volatility and the broad-based pessimism that tends to come with it?

There is always something to worry about. Avoid weekend thinking and ignoring the latest dire predictions of the newscasters. Sell a stock because the company's fundamentals deteriorate, not because the sky is falling.

What makes stocks valuable in the long run isn't the market. It's the profitability of the shares in the companies you own. As corporate profits increase, corporations become more valuable and sooner or later, their shares will sell for a higher price.

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

You can't see the future through a rearview mirror

The basic story remains simple and never-ending. Stocks aren't lottery tickets. There's a company attached to every share.

It only takes a handful of big winners to make a lifetime of investing worthwhile.

Logic is the subject that has helped me most in picking stocks, if only because it taught me to identify the peculiar illogic of Wall Street. Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out just by sitting there, instead of checking the horse. A lot of investors sit around and debate whether a stock is going up, as if the financial muse will give them the answer, instead of checking the company.

Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.

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.

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.

Bargains are the holy grail of the true stockpicker. The fact that 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.

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

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.

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.

The simpler it is, the better I like it.

There's no use diversifying into unknown companies just for the sake of diversity. A foolish diversity is the hobgoblin of small investors. That said, it isn't safe to own just one stock, because in spite of your best efforts, the one you choose might be the victim of unforeseen circumstances. In small portfolios, I'd be comfortable owning between three and ten stocks.

If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes

Visiting stores and testing products is one of the critical elements of the analyst's job.

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

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.

Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they're going to be higher or lower in two to three years, you might as well flip a coin to decide.

The junior high schools and high schools of America have forgotten to teach one of the most important courses of all. Investing.

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

Most investors would be better off in an index fund.

Equity mutual funds are the perfect solution for people who want to own stocks without doing their own research.

There are substantial rewards for adopting a regular routine of investing and following it no matter what, and additional rewards for buying more shares when most investors are scared into selling.

The S&P is up 343.8 percent for 10 years. That is a four-bagger. The general equity funds are up 283 percent. So it's getting worse, the deterioration by professionals is getting worse. The public would be better off in an index fund.

Invest in businesses any idiot could run, because someday one will.

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.

Invest in what you know.

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.

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.

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.

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.

I don't know anyone who said on their deathbed: 'Gee, I wish I'd spent more time at the office.'

In stocks as in romance, ease of divorce is not a sound basis for commitment.

Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you'll likely find one grub; if you turn over 20 rocks you'll find two.

More money is lost anticipating the changes in the overall stock market than any other way of investing.

I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it.

If you have the stomach for stocks, but neither the time nor the inclination to do the homework, invest in equity mutual funds.

You have to keep your priorities straight if you plan to do well in stocks.

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.

I spend about fifteen minutes a year on economic analysis.

The more cash that builds up in the treasury, the greater the pressure to piss it away.

Investing is fun and exciting, but dangerous if you don't do any work.

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.

Thousands of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed's policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can't predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.

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.

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.

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.

In business, competition is never as healthy as total domination.

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.

All the time and effort people devote to picking the right fund, the hot hand, the great manager have, in most cases, led to no advantage.

It isn't the head but the stomach that determines the fate of the stockpicker.

It would be wonderful if we could avoid the setbacks with timely exits, but nobody has figured out how to predict them.