Investor Spotlight: Who is Peter Lynch?
Financial Education Series
Like any sport, trade, or artistry it’s tremendously important to know the “legends of the game”. By researching and studying the likes of Warren Buffett, Ray Dalio, and others, one can gain great wisdom, mindset, and principles towards their own investing goals. It’s unfortunate that many of today’s investors don’t know these names by heart and I feel it is my duty to shed light on why these investors are true legends in the investing community and what we can learn from them.
This week I will be starting with one of the absolute GOATs: Peter Lynch
Peter Lynch was the lead mutual fund manager of the Magellan Fund (FMAGX) under Fidelity Investments from 1977 to 1990. If you invested in this fund in 1977 and walked away in 1990 your return on investment (ROI) would have been 29.2% on average ANNUALLY. Okay cool? No, this is much more than cool, this is one of the greatest (if not the greatest) fund manager track records in the history of the stock market. To put how impressive this is if you simply put $10,000 into the Magellan Fund at Fidelity in 1977 and held till 1990 you would be sitting with $279,519.86 in just 13 years. Yes, you read that correctly. Of course, there would be yearly maintenance fees so your account wouldn’t be exactly $280k but this still is almost unimaginably impressive. Even more so was this fund had over 13 billion at its peak in assets under management and as we all know the bigger the fund, the harder it to manage (I will get into this in another newsletter). Now, it’s difficult to calculate exactly but let’s put it this way, according to this article by the Balance written in 2019: “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 and about 9% over the past 15 years”. It’s safe to say that Peter Lynch is one of the all-time greats. Now, what can we learn from him? Well, I’ll let this video do the talking because people have dedicated ENTIRE books to Peter Lynch’s investment philosophy. If you zombied through this whole article at least watch this video that perfectly sums up his philosophy for what to do with a falling stock that you own. It has helped me in many ways in the past.
Peter Lynch - Dealing with a falling stock
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