Peter Lynch

‘Most mutual funds struggle to even beat the market indices’. This fact has always been true and probably will always remain the truth. Mutual fund managers struggle for a multitude of reasons to present returns that, at least, beat the benchmark and that is why ace investor Warren Buffett famously went on record to tell the average investor that they are much better off investing in index funds. Then again, there are those few that not only beat the benchmark indices but also left their returns far behind.

One of those special mutual fund managers happened to be Peter Lynch, who is probably one of the best mutual fund managers the world has ever seen. In his 13 years as a mutual fund manager, his funds managed to beat the S&P 500 all but twice. With an annualized average return of just over 29% every year, his fund definitely left his investors incredibly happy.

Peter Lynch was a mutual fund manager at the now renowned Magellan Fund owned by Fidelity Investments and gained his incredible reputation not only as an investor but as a bestselling author as well.

Peter Lynch could be termed loosely as a ‘growth investor’, but in reality, his choices in the stock market came from every field imaginable. When he took the realms of the funds in 1977, it was worth just about $18 million. By the time he left, the funds were worth a whopping $14 billion in 1990 with more than 1000 individual holdings in companies.

Many have said that Peter Lynch succeeded over his other mutual funds' managing peers because of his ‘common person’ eye of picking stocks. He always said that his wife was behind some of his most successful stock picks.

Peter Lynch would always pay heed to what Carolyn, his wife, said about the items that she observed at the stores she visited. This led to the famous stock picks by Peter Lynch for the Magellan Fund.

While most people say that the average person is never likely to have the resources of mutual funds and would find it difficult to make returns as they do, Lynch had quite the contrary viewpoint. He said that the average person is much more likely to find out about a great company before the big institutions do and had a set of unique advantages that could lead to great success in the markets.

Another great achievement of Peter Lynch was also his gift to the common investor - his bestselling books - ‘One Up On Wall Street’, ‘Beating the Street’, and ‘Learn to Earn’. One Up On Wall Street became a highly revered book that has been selling for about two decades now and still happens to be one of the best books on investing ever written, according to many.

Lynch coined many terms in his writing language and used examples from his time at Magellan to highlight both his mistakes and times when he was, of course, incredibly profitably correct. He popularized the idea of ‘investing in what you know’ and wrote - ‘If you can't understand the balance sheet, you probably shouldn't own it.’

Peter Lynch retired in 1990. In his 13 years stint, he managed to make a small fund grow into a mutual fund behemoth and the best performing mutual fund in the world at the time. Post-retirement, Lynch spends most of his time taking part in philanthropic activities. After all, an individual that has such a big hand in the growth of mutual funds does not go unrewarded.

At one time, Peter Lynch had a reported net worth of $352 million! There is very limited information available to the public about his personal holdings but seeing his records, we’re pretty sure they would be nothing short of interesting. 

If we could take one thing away from the incredible person that Peter Lynch is, it would be his idea of taking the complexity out of all our investment decisions and following a path we truly understand.

Here's what he once said - ‘Go for a business that any idiot can run - because sooner or later, any idiot is probably going to run it.'

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