Peters Principles

Peters Principle #3: Never invest in any idea you cant illustrate with a crayon.

#4: You cant see the future through a rearview mirror.

#7 The extravagance of any corporate office is directly proportional to managements reluctance to reward the shareholders.

#11 The best stock to buy may be the one you already own.

# 14 If you like the store, chances are youll love the stock.

The St. Agnes Chorus

Lynch maxims through a seventh-grade filter, once again highlight Lynchs open mind.

• Never fall in love with a stock; always have an open mind.
• Just because a stock goes down doesnt mean it cant go lower.
• You should not buy a stock because its cheap but because you know a lot about it.

Scattered Quotes

My diaries are full of such missed opportunities, but the stock market is merciful it always gives the nincopoop a second chance.

So much wisdom in one sentence. Its a great idea to keep an investing diary. Jot down all your notes in it and be sure to write why you buy and sell companies. Over time it will become a great resource and will protect you from the enemy of continuous improvement, self deception. Dont sweat your missed opportunities, there will be many more.

Flexibility was the key [to Magellans success]. There were always undervalued companies to be found somewhere.

By abandoning these great companies for lesser issues, I became a victim of the all-too-common practice of pulling out the flowers and watering the weeds

This is one of the keys to successful investing: focus on companies, not on the stocks.

Bargains are the holy grail of the true stockpicker. the fact that 10-30 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.

The alert shopper has a chance to get the message about retailers earlier than Wall Street does, and to make back all the money he or she ever spends on the merchandise by buying undervalued stocks.

It was huge gains in a few positions that led to Magellans superior results.

In stocks as in romance, ease of divorce is not a sound basis for commitment. If youve chosen widely to begin with, you won;t want a divorce. And if you havent you;re in a mess no matter what.

There were hundreds of losers in Magellans portfolio Fortunately, they werent my biggest positions. This is an important aspect of portfolio management containing your losses.

Theres 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.

Since bonds come before stocks in the lineup of claimants on the companys assets, you can be sure that when bonds sell for next to nothing, the stock will be worth even less before you invest in a low-priced stock in a shaky company, look at whats been happening to the price of the bonds.

Stockpicking is both an art and a science, but too much of either is a dangerous thing.

The smallest investor can follow the Rule of Five and limit the portfolio to five issues. If just one of those is a 10-bagger and the other four combined go nowhere, youve still tripled your money.

That last quotes succinctly conveys what I tried to in this post, Gain required to Make you Whole .

Getting involved with a manageable number of companies and confining your buying ans selling to these is not a bad strategy. Once youve bought a stock, presumably youve learnt something about the industry and the companies place within it The more common practice of buying, selling, and forgetting a long string of companies is not likely to succeed.

There are many common themes in the quotes; buy what you know, buy companies not stocks, and water the flowers to name a few. I hope youve enjoyed these Lynchisms and perhaps learnt or at least was reminded of something as well. Please take a minute to share your favourite Lynch quote(s).