I’ve heard of Peter Lynch many years ago when I started to invest, and saw some of his books sitting on the book shelf while browsing in the book shop. I vaguely knew that he is one of the better-known investors, but didn’t really read a lot about him all this while. Recently, YouTube recommended the video with the title: “Peter Lynch: How to Invest for Beginners” (link: https://www.youtube.com/watch?v=MLIxSL1v79g) to me and I found that the content is still valid even though this video was taken in 1994. You may check out some other links on Peter Lynch which I think is pretty useful for investors here:
Before we go into details, let’s talk a little bit about Peter Lynch. Known as the greatest mutual fund manager ever, Peter Lynch achieved ‘legendary’ status while he was managing the Fidelity Magellan Fund under Fidelity Investments Inc from 1977 to 1990, before retiring at the age of 46. Under his management, the Magellan Fund recorded 29.2% average annual return, consistently beating the S&P 500 stock market index, making it the best performing fund in the world. Asset under management (AUM) grew from USD 18 million to a staggering USD 14 billion during his 13-year tenure as the fund manager of Magellan Fund. Since his retirement, he’s been actively involved in various form of charities, and only work part time with Fidelity Management & Research Co. as a mentor for young analyst. He also wrote a few best-selling books like One Up on Wall Street and Beating Wall Street.
Ok, enough introduction, let’s go into some of his advises on stock investment.
1. "Know What You’re Buying"
I put this as No.1 because I think this is the most important one, and it is pretty similar to Warren Buffett’s circle of competence - buy shares that their underlying business that you can understand and comprehend. For example, if you’re a banker, you should buy bank stocks because you’ll know more than anyone else as you’re in the industry. You shall make use of your advantage and apply it in stock investment. I’m really surprised that many retail investors out there don’t even know what they’re buying, or buy shares that they don’t even understand the business model. What surprises me more is that all these retail investors are actually really careful with their money. When buying a car, or a tv, or a smart phone, people do research and comparison, try to understand the products and try to get the best deal they could possibly find. But when it comes to stock investment, they would just buy casually based on hear-say or some random recommendation on the stock forum from some random people they don’t even know.
"If you can’t explain to a 10-year-old kid in less than 2 minutes why you own a stock, you shouldn't own it." - Peter Lynch
2. "Stocks aren't lottery tickets. Behind every stock is a company. If the company does well, over time the stocks do well."
This is the same principle adopted in value investing, and is related to No.1. To perform well in stock market, you have to study the businesses behind the stocks that you bought. You’ll be surprised how many people actually don’t care about this when investing in stock market. Far too many retail investors focus too much on the share price, but not the business of the company behind the share. Many just reluctant to spend time to read about the annual report, the balance sheet, the cash flow statements, etc. The amount of time one spent in studying the trend of the share price should be used to study the businesses.
3. "In the stock market, the most important organ is the stomach. It's not the brain."
What it means is that can you take the pain when the market is declining? It’s a question of what’s your tolerance for pain. In this era, there are plenty of news, good or bad, find their ways to you via social media, newspaper, Youtube, etc. everyday. The key is can you stay calm and continue to hold on to your stocks? One has to really accept the fact that stock market goes up, and goes down too. That’s the nature of stock market. In reality, many become anxious and started to find all sorts of reasons to blame when the stocks that they’re holding are declining. If you want to invest in stock market, you’ll have to get use to the volatility of the market. If you’re not ready for any form of decline, you should stay away from stock market.
4. "Don’t try to predict the market"
Many retail investors like to predict the market. They always feel that they know how the market is going to fare. However, history had taught us that no one can predict the market, or the economy. If you look at all the great investors like Warren Buffett, Benjamin Graham, Philip Fisher, none of them make money in the stock market by predicting the market or the economy. Ironically, people who likes to predict the share market will tell you not to buy when the market is going down because you’ll never know when the market will reach the bottom. This is just one of the funny self-contradicting mindsets that ordinary investors had.
"More people have lost money waiting for corrections and anticipating corrections than in the actual corrections." – Peter Lynch
5. "Market crashes are great opportunity"
Many retail investors are afraid of market crash, it’s like the end of the world to them. While it’s true that you may lost a lot of money during market crash or bear market, there are also plenty of opportunities to buy quality stocks at a highly depressed price. History thought us that the share market will always recover from the bear market. Be it the Asian Financial Crisis in 1997, the Global Financial Crisis in 2008, or the more recent March 2020, every time the share market recovers and come back stronger. For example, 1155 MAYBANK dropped to near RM 7.00 twice in March 2020 and November 2020, now it’s trading at RM 8.26. That’s a 18% gain in about 1 year if you managed to buy it at RM 7.00. 18% is a respectable return, all you need to do is to identify and shortlist great companies and buy them when the market is declining. Malaysia very own value investor Cold Eye shares the same opinion on this. (Link: https://www.enanyang.my/%E8%B4%A2%E7%BB%8F/%E5%8D%81%E5%B9%B4%E4%B8%80%E9%81%87%E6%8A%95%E8%B5%84%E6%9C%BA%E4%BC%9A%E5%86%B7%E7%9C%BC%EF%BC%88%E4%B8%8B%E7%AF%87%EF%BC%89).
I hope this blog can help you in your investment journey.
Disclaimer: This is a personal opinion recorded for my personal record. Nothing on this Blog constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person. The author shall not be held accountable for any investment decision made by the reader. Invest at your own risk.
我在多年前刚开始投资的时候就听所过Peter Lynch这一号人物，也在逛书店的时候看过他的书。我大概知道他是一位相当有名的投资大师，但是我对他并没有更深入的了解。直到最近Youtube推荐了我一个名为 “Peter Lynch: How to Invest for Beginners” (Peter Lynch:新手如何投资, https://www.youtube.com/watch?v=MLIxSL1v79g)的视频而我觉得它的内容放到今天还挺适用的，即使该视频的内容是在1994年拍摄的。以下还有一些我觉得对投资者相当有用的链接：
在还没进入正题前，先简略的介绍Peter Lynch。Peter Lynch是有史以来最伟大的基金经理，在1977年至1990年于Fidelity Investments Inc.担任基金经理时管理Fidelity Magellan Fund从而成为传奇人物，然后在46岁退休。在他的管理下，Megallan Fund录得平均29.2%的年回酬，长期取得比S&P 500指数更高的回酬，成为全世界表现最好的基金。所管理的资产在他十三年的管理期间从一千八百万美金暴增至一百四十亿美金。在退休后，Peter Lynch热衷于慈善事业，以及在Fidelity Management & Research Co.担任年轻分析员的导师。他也撰写了几本畅销书如One Up on Wall Street以及Beating Wall Street。
好了废话少说，进入正题：
1. 了解您买的是什么
我把这个放第一位因为我觉得这是最重要的，而且跟巴菲特推崇的能力圈很相似 – 购买您能够了解与解读的公司的股票。举个例子，如果您是在银行上班，您应该购买银行股，因为您比其他一般人都更了解银行这个行业。您应该把这个优势运用在股票投资上。我很惊讶很多散户根本不知道自己购买的股票是做什么生意，或是购买一些自己都不能明白的公司。更加神奇的是，这些散户们在花钱的时候其实是十分小心的。譬如买一辆车，或是电视机，或是智能手机，他们通常都会做研究和比较，去了解要买的产品，然后寻找一个最好的买卖。但是，在投资股票方面，他们却很随意的根据一些听说到的消息或在网上随意看到的推荐而购买股票。
“如果您无法在2分钟内向10岁的孩子解释为什么拥有某个股票，那么您就不应该拥有它。”
2. 股票不是彩票。每个股票背后都有一间公司。如果公司表现良好，股票也会跟着表现良好。
这个跟价值投资的原则是一样的，也跟上面第一则有关系。如果想要在股票市场有所表现，您必须去研究您买的股票背后的企业。许多散户都不把股票背后的企业当一回事，他们大多数都只是关注股票的价格。他们不愿意花时间去阅读年报，资产负债表，现金流量表等等。与其花时间在研究股价，不如花时间去研究股票背后的企业。
3. 在股票市场里，最重要的是肚量，不是头脑。
这里想要表达的是：当市场下滑的时候，您到底可以承受多大的痛楚？这是有关于您对亏钱的痛苦的承受能力。在这个时代，各种各样的新闻，无论好坏，每天都会通过不同的管道送到您的面前。重点是您可不可以保持冷静而继续持有您的股票？我们一定要真正的接受股市是会上升，也会下滑的。这是股市的本性。在现实当中，许许多多的投资者在他们所持有的股票下滑的时候会变得焦虑不安，还会寻找各式各样的理由和藉口来怪罪。如果您想要投资股票，您就必须接受股市的浮动。如果您不能够接受任何的下滑，您就因该离开股市。
4. 不要尝试去预测市场走向。
很多散户都很喜欢预测股市的走向。他们总是认为自己有能力预知市场的趋势。然而，历史告诉我们从来没有任何人可以预测股市或市场的走向。看一看像巴菲特，本杰明·格雷厄姆，菲利普·费舍尔等等的这些投资大师，他们没有一人是通过预测股市而在股市赚大钱的。讽刺的是，这些喜欢预测股市的人通常会劝您不要在股市下滑的时候买股，因为没有人知道股市何时会跌至谷底。这只是散户的其中一个自相矛盾又可笑的思维。
“等待股市回调或是预期股票回调而亏钱的人比真正在股市回调中亏钱的人更多.”
5. 市场崩溃（熊市）是巨大的机会。
很多散户都很害怕熊市，对他们而言熊市就好像是世界末日。说实在的，您确实会在熊市当中亏很多钱，但是熊市也提供了很多机会让您可以以极度便宜的价格买入优质股。历史教会我们股市总是会从熊市反弹的。像是1997年的亚洲金融风暴，2008年的全球金融风暴，以及最近的2020年三月，每一次股市都会收复失地，而且恢复得比之前更高。举个例子，1155 MAYBANK在2020年3月和11月都曾跌至RM 7.00左右，而现在是收在RM 8.26。如果您在RM 7.00的时候买入，那么您在一年内便取得18%回酬。18%是一个相当可观得回酬，您需要做的就是找出好公司并放进您的观察清单，然后在市场下滑时购买这些好公司。我们马来西亚的价值投资大师冷眼（冯时能）对此也有着同样的看法 (https://www.enanyang.my/%E8%B4%A2%E7%BB%8F/%E5%8D%81%E5%B9%B4%E4%B8%80%E9%81%87%E6%8A%95%E8%B5%84%E6%9C%BA%E4%BC%9A%E5%86%B7%E7%9C%BC%EF%BC%88%E4%B8%8B%E7%AF%87%EF%BC%89)。
希望这篇博客可以在您投资的路上有所帮助。
免责声明：这只是个人意见，记录下来供我个人使用。此博客上的任何内容均不构成投资建议，绩效数据或任何建议，任何证券，证券组合，投资产品，交易或投资策略均适合任何特定人士的建议。作者对读者做出的任何投资决定概不负责。投资风险自负。