Peter Lynch Quotations | Page 2

The list of qualities (an investor should have) include patience, self-reliance, common sense, a tolerance for pain, open-mindedness, detachment, persistence, humility, flexibility, a willingness to do independent research, an equal willingness to admit mistakes, and the ability to ignore general panic.

If you can't find any companies that you think are attractive, put your money in the bank until you discover some.

If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes

There seems to be an unwritten rule on Wall Street: If you don't understand it, then put your life savings into it. Shun the enterprise around the corner, which can at least be observed, and seek out the one that manufactures an incomprehensible product.

Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you'll likely find one grub; if you turn over 20 rocks you'll find two.

Know what you own, and know why you own it.

Time is on your side when you own shares of superior companies.

There are substantial rewards for adopting a regular routine of investing and following it no matter what, and additional rewards for buying more shares when most investors are scared into selling.

There's no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or worse, to buy more of it when the fundamentals are deteriorating.

My method for picking stocks has never changed. When businesses go from crappy to semicrappy, there's money to be made.

You have to let the big ones make up for your mistakes.

Equity mutual funds are the perfect solution for people who want to own stocks without doing their own research.

You should not buy a stock because it's cheap but because you know a lot about it.

Invest in businesses any idiot could run, because someday one will.

The simpler it is, the better I like it.

Everyone has the brain power to make money in stocks. Not everyone has the stomach.

I spend about fifteen minutes a year on economic analysis.

Owning stocks is like having children - don't get involved with more than you can handle.

Hold no more stocks than you can remain informed on.

It would be wonderful if we could avoid the setbacks with timely exits, but nobody has figured out how to predict them.

All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don't work out.

Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they're going to be higher or lower in two to three years, you might as well flip a coin to decide.

The natural-born investor is a myth.

What makes stocks valuable in the long run isn't the market. It's the profitability of the shares in the companies you own. As corporate profits increase, corporations become more valuable and sooner or later, their shares will sell for a higher price.

If you have the stomach for stocks, but neither the time nor the inclination to do the homework, invest in equity mutual funds.

During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents and blue-jeans (Levi Strauss) made a nice profit.

Never invest in any idea you can't illustrate with a crayon

Investing in stocks is an art, not a science, and people who've been trained to rigidly quantify everything have a big disadvantage.

Often, there is no correlation between the success of a company's operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.

Just because you buy a stock and it goes up does not mean you are right. Just because you buy a stock and it goes down does not mean you are wrong.

Visiting stores and testing products is one of the critical elements of the analyst's job.

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

There's a company behind every stock and a reason companies - and their stocks - perform the way they do.

The more cash that builds up in the treasury, the greater the pressure to piss it away.

Bargains are the holy grail of the true stockpicker. The fact that 10 to 30 percent of our net worth is lost in a market sell-off is of little consequence. We see the latest correction not as a disaster but as an opportunity to acquire more shares at low prices. This is how great fortunes are made over time.

Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.

I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it.

Stocks are a safe bet, but only if you stay invested long enough to ride out the corrections.

Long shots almost always miss the mark.

You just don't know when you can find the bottom.

When management owns stock, then rewarding the shareholders becomes a first priority, whereas when management simply collects a paycheck, then increasing salaries becomes a first priority.

The S&P is up 343.8 percent for 10 years. That is a four-bagger. The general equity funds are up 283 percent. So it's getting worse, the deterioration by professionals is getting worse. The public would be better off in an index fund.

The typical big winner in the Lynch portfolio generally takes three to ten years to play out.

There's no use diversifying into unknown companies just for the sake of diversity. A foolish diversity is the hobgoblin of small investors. That said, it isn't safe to own just one stock, because in spite of your best efforts, the one you choose might be the victim of unforeseen circumstances. In small portfolios, I'd be comfortable owning between three and ten stocks.

There's lots of stocks out there and all you need is a few of 'em. That's been my philosophy.

My high-tech aversion caused me to make fun of the typical biotech enterprise: $100 million in cash from selling shares, one hundred Ph.D.'s, 99 microscopes, and zero revenues.

In the long run, it's not just how much money you make that will determine your future prosperity. It's how much of that money you put to work by saving it and investing it.