Thread by @EconomyApp

Peter Lynch is a legendary investor.

He outlined 6 stock categories you MUST know:

🚀 Fast Growers $SHOP $TSLA
🏰 Stalwarts $HD $V
🐢 Slow Growers $JNJ $PG
🔄 Turnarounds $META $PTON
🎢 Cyclicals $BA $CAT
💼 Asset Plays $BRK $IBM

Here is his playbook for each category 👇

🚀 Fast Growers (like $TSLA, $SHOP)

Playbook: Allocate only a limited portion of your portfolio due to higher risk.

This is Lynch's preferred category:

📈 High Growth Rate (> 20%).
⚖️ Potentially Overvalued.
🏆 Can be huge winners.
⚠️ Risk-Prone.
🦁 Aggressive.
💡 Innovative.

🏰 Stalwarts (like $KO, $HD or $V)

Playbook: Own them, don’t trade them.

⚖️ Lower Risk.
📏 Large scale.
🪂 Stable nature
⚓ Portfolio Anchors.
📈 Moderate Growth.
💰 Regular Dividends.
🛡️ Recession Resilience.

🐢 Slow Growers (like $JNJ or $PG)

Playbook: Lynch suggests pruning them from the portfolio. He's not particularly fond of this category.

🪂 Low volatility.
👑 Sector leaders.
🚶 Minimal growth.
💰 Regular dividends.
🛡️ Low risk, low reward.
⚖️ Mature and predictable.

🔄 Turnarounds (like $PTON)

Playbook: Lynch generally steers clear of turnarounds.

Why? They seldom turn.

⚠️ High risk, high reward.
📈 Potential for recovery.
⏳ Patience is required.
🎓 Demands expertise.
📉 Underperforming.
🎲 Volatile.

But exceptions exist $META 👇

🎢 Cyclicals

Playbook: A challenging field, best suited for industry insiders, not beginners.

Lynch advises caution.

🚫 Not beginner-friendly.
⏲️ Predictable patterns.
💰 Fluctuating profits.
🏭 Industry-specific.
⌛ Timing is crucial.
🌩️ High volatility.

💼 Asset Plays

Playbook: Discover hidden value before the market does and be patient.

🔑 Patience is key.
💰 Seek undervalued assets.
🧠 Tangible or intangible plays.
🔍 Requires thorough analysis.
🎯 Potential acquisition targets.

Example: eBay's spin-off of PayPal $PYPL.

But wait, there's more!

Lynch identified favorable stock traits he always looks for.

These traits helped him outperform the market by a factor of 2X over 13 years.

We list them in our full article here 👇
appeconomyinsights.com/p/6-stock-type…