Thread by @BullsforBears

Peter Lynch way - 6 type of stocks
1)Fast growers
Small cap companies > 25% a year
Dont have to enter in 1st,2nd,3rd year,continue to grow for 5,10,even 15 years
Buy fast growers in 2nd,3rd year,when they may have got the formula right
Look fr steady earnings growth dividend

2)Slow growers
Large cap companies, high market cap,low P/E
Stable earnings growth at the rate of the economy or slower
Prices dont fluctuate much
High dividend paying 7to 10%
Suitable for low risk investors not looking for high capital growth
@peterlynchstock @WarrenBuffett

3)Cyclicals
Directly connected to economy
Best time to buy when earnings go from bad to mediocre & little beyond
Best time to enter cyclicals when P/Eis high,reporting bad earnings not when P/E is low,earnings are spectacular
Pick a strong cyclical with good cash flow,less debt

So it can survive a down cycle
In cyclicals turnarounds can take 2 to 3 years
Lynch was a master at picking cyclicals, reason for his high returns at Magellan,didn't just chase the fancy names
@thescorpionphil @Coolfundoo @Prakashplutus

4) Turnarounds
Forgotten companies,less liked,even hated ,beaten down stocks
If balance sheet has sufficient cash to make it through 1 or 2 years,may reverse fortunes
Doing things to improve,like launch new products,change in management cutting costs,caution most fail

5)Asset players
Companies with a hidden asset,not reflected in the stock price
Eg.Coca cola name
Name may have incredible value ,huge asset when these companies rollout new products
Own real estate
Hold shares in other companies eg bajan holdings

6)Stalwarts
Large companies,strong fundamentals, resilient to economic uncertainty
Modest profit growth of 10%
Respected,rapid turnaround when economy recovers from recession
Earnings grow better than economy, low P/E, low debt

@MagellanCapital @georgesoros @

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