Peter Lynch
Peter Lynch's personal stats
Age: Born Jan. 19, 1944.
Source of wealth: Investment management.
Marital status: Widower.
Residence: Boston, Massachusetts.
Children: Three
Education: Boston College (BA), The Wharton School of the University of Pennsylvania (MBA

Investing great Peter Lynch said, "The real key to making money in stocks is not to get scared out of them."
Volatility can be scary, investors should maintain calm. And the best way to do that is to develop a strong investment thesis --
a summary of the fundamental reasons why a business can become more valuable over time.

Peter Lynch's investment approach

Lynch's most popular investment philosophy is "invest in what you know," which was a major theme of his best-selling book One Up on Wall Street. Lynch believes that contrary to popular opinion, smaller investors actually have an advantage over Wall Street professionals because they can find real-world investment opportunities before they land on Wall Street's radar. In recent years, Lynch has specifically mentioned Apple (AAPL 0.58%) as an opportunity henoticed when his daughter bought an iPod at a higher price than most other portable music players on the market, although he never acted and bought the stock.


Lynch is not a market-timer. He believes in finding great opportunities and holding on to them. In other words, Lynch didn't buy or sell stocks in anticipation of the market going up or down. He also used a combination of growth and value investing, using the latter to find stocks trading at reasonable value but using growth principles to find opportunities for rapid business growth. His strategy is often referred to as "growth at a reasonable price," or GARP.
Growth at a reasonable price (GARP) is a strategy where investors seek growth stocks that trade at a fair valuation.
When it comes to growth stories, Lynch advises investors to determine what "inning of the ball game" a company is in. One example he gives is a big position he opened in McDonald's (MCD 0.89%), which was unpopular with many investors at the time who saw limited room for growth -- and then spent the next two decades building its international footprint. And during the 20-year period starting in the mid-1980s, when Lynch invested, McDonald's generated a 3,000% total return for investors. The lesson: Don't assume a big and successful business has no room to grow. A similar situation unfolded with Starbucks (SBUX -0.74%) in more recent times.

Although he retired from the Magellan Fund in 1990, Lynch occasionally gives interviews and makes television appearances. In recent years, he has said that investors aren’t "careful" enough in today’s market, with too many people buying a stock simply because they heard about it from a friend or at a party. He cautions against trading, which has become far easier in today's world of commission-free trading, but also says that there is much more information available today for investors who want to learn how to invest properly and do their homework.


Peter Lynch's investments
One of the more interesting aspects of Lynch's investment strategy is that, unlike most other highly successful investors, Lynch achieved his returns without a concentrated stock portfolio. For example, Berkshire Hathaway’s (BRK.A 0.12%)(BRK.B -0.33%) stock portfolio is worth about $350 billion and is mainly run by Warren Buffett, but it contains fewer than 50 stocks, with the bulk of the assets concentrated in the five largest positions. On the other hand, at the time Lynch resigned as the manager of the Magellan Fund in 1990, it had more than 1,000 individual stocks in its portfolio. And his portfolio was skewed toward small companies where Lynch saw lots of growth potential.
To name a few, Ford (F 0.0%), General Electric (GE 0.96%), and Lowe’s (LOW -0.19%) were some of Lynch's most profitable stocks that still trade on public markets today.

More from this investor
As mentioned, Peter Lynch wrote three books (with co-author John Rothchild):


One Up on Wall Street.
https://www.pdfdrive.com/one-up-on-wall-street-by-peter-lynch-e200970372.html

Beating the Street.
https://www.pdfdrive.com/beating-the-street-e194437188.html

Learn to Earn.
https://www.pdfdrive.com/learn-to-earn-a-beginners-guide-to-the-basics-of-investing-and-business-e165036677.html

One Up on Wall Street is a primer on Lynch’s investment philosophy and the advantages he feels individual investors have over Wall Street experts. Beating the Street takes it a step further and shows investors real-world examples of how Lynch uses his philosophy to pick stocks. Finally, Learn to Earn is geared toward newer investors, especially those who are relatively young.

Peter Lynch FAQs

What is Peter Lynch's investing style?

Peter Lynch uses a combination of value investing principles, growth investment principles, and other investment techniques to find excellent opportunities. He doesn't limit his strategy to any particular sector and doesn't have an upper limit on the number of stocks he's willing to hold at a time. However, he's a firm believer in thoroughly analyzing investment opportunities and using everyday observations to find investment opportunities before they are on Wall Street's radar.

What companies did Peter Lynch invest in?

At the time he retired from the Magellan Fund in 1990, the portfolio contained more than 1,000 stocks. Notable investments Lynch made include McDonald's, Ford, General Electric, and Lowe's, all of which were quite profitable for Lynch and his investors.

How many stocks did Peter Lynch own?

If we include stocks he bought more than once, Lynch purchased well over 10,000 stocks in the Magellan Fund's portfolio. At any given time, it was common for there to be over 1,000 stocks in the portfolio, and at one point, the Magellan Fund had as many as 1,400 stocks in it.