Peter Lynch is regarded as one of the best fund managers in the world and from 1977 to 1990 had an average rate of return of 29.2%

Here is a 🧵 on how the legend did it...
2/ Lynch worked as the manager of the Magellan Fund for Fidelity during his 13-year tenure.

If you simply put $10,000 into this fund in 1977 and held till 1990 you would be sitting with $279,519.86 in just 13 years (minus maintenance fees/taxes).
3/ Lynch's curiosity in the market started when he was a teenager caddying for an upscale golf club.

He attended Boston College and even used profits from his first 10 bagger, "Flying Tiger Airlines" to pay some of his way through school.
4/ After BC he got his MBA from Wharton in 1968. After this, he served in the Army from 1967 through 1969.

During Wharton, he was an intern at Fidelity and returned to a full-time position and eventually took full command of the $18 Mill AUM Megellan Fund in 1977
5/ What made Lynch so great?

Lynch believed that anyone could outperform the market, not just the big funds, quants, high-frequency traders, and suits on Wallstreet.

He broke down his strategy as follows...
6/ Know What You Own

Lynch coined the famous saying "know what you own and why you own it".

He harped on only investing in companies that you have a gauge on, doing actual homework on those companies, and not investing in what you hope will happen.
7/ Listen Under Your Roof

Lynch credits a lot of his success in his career to his wife Carolyn who would frequently make suggestions about the movements of retail & other products.

He believed that people had an advantage being closer to companies by noticing what's trending
8/ Diversify

It's safe to say Lynch believed in the notion that the only free lunch in investing is diversification.

As the manager of Magellan, Lynch held as many as 1,400 stocks at one time.
9/ Lynch is famous for categorizing his stocks

Fast Growers: Companies w/ expected earnings growth of 20%-50%

Stalwarts: Large companies w/ Bill $ sales & 10%-20% expected earnings growth

Slow Growers: Companies that had expected earnings growth < 10% but paid a good dividend
10/ Lynch used the PEG ratio which is the stock's P/E ratio divided by the growth rate of its earnings for a specified time period

According to Lynch:

PEG >1.0 = overvalued
PEG <1.0 = undervalued

A stock can have a high PE & low PEG since its expected earnings will justify it
11/ Lynch would

- buy stocks that he knew
- categorize the stock by industry & growth potential
- use ratios to determine their value
- diversify & rebalance based off outputs above
- have patience since the typical big winner for him would generally take 3-10 years to play out
12/ Lynch will go down as one of the all-time greats and in my mind is my favorite investor because of how easily he describes his thought process in his famous book "One Up On Wallstreet"

An absolute must read in my mind
13/ Lastly, to put Lynch's 29.2% performance in perspective

@thebalance wrote: “The average ROI annually for all mutual funds using the S&P 500 Index as a benchmark, stocks have had an average annual return of nearly 13% over the past 10 years & about 9% over the past 15 years”
14/ If you enjoyed this thread make sure to:

1. Follow for more dope threads and finance content

2. Subscribe to my newsletter in which I breakdown companies and talk about the most exciting news in tech, finance, and crypto
15/ Lastly here is all my best threads under one mega thread - you will find some other gems in there if you enjoyed this one

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More from @gannonbreslin

2 Jul
I’m tweeting this out there again

I bought a $PLTR LEAP call option

Expiration: June 2022
Strike price: $15
Avg. cost (premium): $11.30
Total cost: $1,130

What the hell does this all mean?

Option teaching thread below 👇
2/ LEAPS are just a way of describing an option that has an expiration of longer than one year.

Since I bought a “call” I am making a leveraged bet that the stock will go up in a certain amount of time & if I bought a “put” it would be in the hopes of it going down.
3/ In basic terms, an option is a derivative of the share price. One option contract is the equivalent of 100 shares.

So instead of buying 100 shares of $PLTR (which would be ≈ $2456) I bought a call option contract worth $1,130.

Why wouldn’t anyone do this?

RISK, lots of it
Read 15 tweets
15 Apr
Got a lot of DMs asking about the Series 65 and how to prepare

Here are some quick tips that worked for me:

1) Do not underestimate it - having to take it more than once sucks and it costs about $175 each time. A reoccurring theme is people not realizing how difficult it is...
2) I studied using the Kaplan Series 65 11th Edition Study Guide book. Have to at least read every chapter once (if you are lucky)

3) Make flashcards for every chapter - so much information that by the time you get to chapter 10 you already are forgetting Chapter 3

4) Something that I don't think I could have passed without is the Kaplan "SecuritiesPro QBank" - go through every question at least once & make sure to take several practice exams

5) Use the appendix in the back of the study guide book - some great info for summarizing concepts
Read 5 tweets
11 Mar
5 books every beginning investor should read:

1) The Richest Man in Babylon - George Clason

2) Unshakable: Your Financial Freedom Playbook - Tony Robbins

3) The Millionaire Next Door - Thomas Stanley

4) The Intelligent Investor - Benjamin Graham

5) Flash Boys - Michael Lewis

These books will teach you how to:

(In order)

1) Get stoked to build wealth

2) To have time in the market not time the market

3) Spend wisely and have frugality

4) Analyze a companies fundamentals

5) Be aware of institutional tricks/schemes
Of course there are other amazing books out there for beginners. These were just some out of the many that I have read that I think can get someone from “A to B” the fastest.

If you want a further analysis on these books read here:…
Read 4 tweets
10 Mar
A couple days ago it was announced that Square bought a majority steak in Tidal for $297 M

Tidal, a music streaming platform founded by Jay-Z, never really had great liftoff

My first question is why would a banking/finance company like $SQ want to get into the music space?

2/ Tidal is getting "bullied"

The big players like Apple Music, Spotify, Amazon music, etc. have a stronghold on the space. In all honesty, the only time I really remember Tidal making rounds on the internet was when one of Kanye's albums was exclusively being released on it.
3/ $297M is pennies for Square

Square is a 102 BILLION market cap company that did over 3 B in rev just last quarter.

With the help of @ycharts we can see that $SQ has around 3 B in cash & cash equivalents. Buying Tidal truly isn't a huge risk for Square w/ a >1 current ratio
Read 12 tweets
25 Jan
1/ Winners Only Handbook

I felt it was time to make a mega collection of all my threads on finance, business, market meme videos, & newsletter pieces ( @rebelmarkets ).

My goal is to be an account that I wish I could've followed when I started out - Please like & share!
Read 21 tweets
24 Jan
In this thread I will cover 10 investing principles that should help any beginning investor.

These are principles that took me years to sharpen and I continue to work on them on a daily basis.

The Winners Only Handbook

1/ Know what you are buying

It's horrific how many people buy a stock and have done ZERO due diligence on it. In today's day and age with the internet at your fingertips there's simply no reason to not at least look up a company's balance sheet or income statement.
2/ Learn the craft

Knowing what you're looking for in the balance sheet/income/cash flow statement is extremely important. Study all three of these documents and know the ins and outs of them like the back of your hand.

Here is a place to…
Read 12 tweets

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