Thread by @AnshumanCharts

"All the math you need in the stock market you get in the fourth grade"

A story and strategy of one of the most successful investor of all time '' PETER LYNCH ''

#investing #StockMarket #TRADINGTIPS

👉Peter Lynch is a famous capitalist and fund manager. At present, Peter Lynch net worth is $450 million.
👉As the manager of Fidelity Investments’ Magellan Fund from 1977 to 1990 – which averaged a 29.2% return during that time and grew from $18 million in assets to $14 billion,

👉Since retirement, he is involved in extending his knowledge on investment strategies and philanthropic activities. He is well known for his skills in managing the Magellan Fund and providing the investors with the highest returns.

👉Early Life
He was born on January 19, 1944, in the US. Peter's father died due to cancer when Peter was just 10 years old. After the death of his father, the condition of his family was not good.

👉So to support her mother in earning ,he started working as a caddy in some golf club. Working as a caddy proved to be of great significance in his life, as his interest in the stock market developed by overhearing the conversations of great investor who came to play golf there.

👉During Lynch's time as a sophomore at Boston College, he used his savings to buy 100 shares of Flying Tiger Airlines at $8 per share. The stock would later rise to $80 per share, profits from which helped pay for his education.

👉Peter used those returns to pay the fees of his college. He completed his graduation in the year of 1965. He also completed his Masters in Business Administration from the Wharton School of University of Pennsylvania in 1968.

👉In 1966, Lynch was hired as an intern with Fidelity Investments partly because he had been caddying for Fidelity's president, D. George Sullivan,(among others) at Brae Burn Country Club in Newton, Massachusetts.
He initially covered the paper, chemical,and publishing industries

👉 when he returned after a two-year Army stint he was hired permanently in 1969. This time Lynch was charged with following the textiles, metals, mining, and chemicals industries, eventually becoming Fidelity's director of research from 1974 to 1977

👉After serving for three years as director of research, finally, he was made the Fund Manager of Magellan Fund in 1977. This fund mostly held domestic investments. The day peter took over this fund, it was having total investments of $18 million, and 13 years later,

👉when Peter resigned from that post and company, the fund held investments of approx. $14 billion. This is the 13 years of his career where he averaged an annual return of 29.2%, which is marked in the history of mutual funds. He retired at the age of 46.

👉Investment Philosophy Of Peter Lynch

Peter Lynch investment strategy is known to the whole world that how excellent it was and still is.

The most important philosophy, as per Peter Lynch, is

“Invest in what you know."

👉It is a fact that everyone has good knowledge of their own work, and they can easily understand the financial and non-financial performance of companies involved in business related to their work. So, he advised many people that investment should be made in those sectors

👉in which you are regularly engrossed. Also, he suggested investing in companies that are manufacturing or retailing the products we use in our day to day life. He also believes in investing for the long term.

👉PEG Ratio By Peter Lynch

As per Peter Lynch, the price-earnings ratio was not enough to judge the growth of any company. Though it is a myth in the market that companies with lower price-earnings ratios are right for investing,

👉he believed the fact that only this factor does not define the true picture of the firm. So he formulated a Price to Earnings to Growth Ratio. This was a basic formula that divided the price-earnings ratio of the company with the growth rate of the firm.

👉According to him, those companies which were having a lower growth rate than their price-earnings ratio were undervalued in the market and vice versa. He started exploring these undervalued companies and invested in them.

👉Till the company remained in its growth phase, the money was kept invested by him in them. Once they reach their apex, he sold the shares and invested in other growing companies.

Source InvestingAnswers , Wikipedia ,Finnovationz

👉Lynch popularized the stock investment strategy “GARP” (Growth At A Reasonable Price), which is a hybrid stock-picking approach that balances Growth investing potential for share-price increases with the discipline of Value investing to avoid buying overpriced stocks.

👉He coined the phrase "ten bagger" in a financial context. This refers to an investment which is worth ten times its original purchase price, and comes from baseball where the number of "bags" or "bases" that a batter can run to is a measure of the success of that runner's hit.

👉A baseball player who hits a home run will pass all four bases, and so such a hit is sometimes called a four-bagger. Similarly, a baseball double hit is sometimes called a two bagger.

👉As Lynch wrote in One Up on Wall Street, “In my business a fourbagger is nice, but a tenbagger is the fiscal equivalent of two home runs and a double.”

👉He retired at the age of 46 from that company, where he served for 17 years. After retirement, he became a philanthropist. He donated $10 million to the college from where he graduated. Peter Lynch started a Lynch Foundation for education and hospital initiatives.

👉A lot of his earnings go to charity and donations. He has the vision to spread his knowledge on investing to as many people as he could in his life.
He is author of three best-selling books known as, One up on Wall Street 1989, Beating the Street 1993, and Learn to Earn 1995.