A Look Into Peter Lynch’s Investment Style – 5 Key Criteria – What Would He Buy Today?
Every once in a while, I like to take a closer look at an event that comes up in our “This Day in History” archive, which gets posted daily on Facebook, Twitter, and is now available as an Amazon Flash Briefing.
Today we look into the life of Peter Lynch, whose birthday is this week, and who is one of the most successful mutual fund managers in history.
What did Peter Lynch look for in an investment, and what stocks would Peter Lynch buy today?
Lynch looked for 5 key criteria when selecting an investment:
Buy What You Know
Growth At A Reasonable Price
Avoid The Hot Stocks
Strong Balance Sheet
We’ll look at these in more detail below, and a list of companies that meet all of these criteria – but first a quick look at Lynch’s historic run as a mutual fund manager:
Ben Graham Value Screens – Which Companies Pass the Test Today? April 2016
Looking for potential investments? With thousands of stocks to research, getting started can seem a bit overwhelming. Here are a couple screens (and the companies that made it through) using sets of criteria utilized by the “Dean of Wall Street” and “Godfather of Value Investing”, Ben Graham.
The significance of Ben Graham’s Wall Street career cannot be overstated. His investment partnership averaged 17% annual returns over its existence. He created and mentored some of the most successful investors ever to live and has been responsible for the education of more investors than almost anyone with his 2 best-selling investment books, The Intelligent Investor and Security Analysis. He had a very disciplined, rule-based approach to investing that focused on only one thing: A company’s intrinsic value.
The following comes from the book, “Einstein of Money”, a great biography of Ben Graham that is also focused on his investment work. Every other chapter breaks from the life story of Graham to detail a main concept in his investment philosophy. Whether it is his concept of Margin of Safety, Fundamental Analysis or advice on dealing with “Mr. Market”, the author does a great job mixing in the life of Benjamin Graham and the ideas behind his work. [continue reading…]