Investor Peter Lynchknown for his remarkable 13-year tenure as manager Fidelity's Magellan Fund recently said that it has never explicitly promoted investing in the stock market.
What happened: Lynch, the author of the influential investing book “One Up On Wall Street,” clarified his position on stock investing in a conversation with Yahoo Finance.
During the interview, he emphasized that his goal was not to encourage stock investments, but to provide advice to those who decided to invest on how to do it properly.
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During his leadership of the Fidelity Magellan fund from 1977 to 1990, the fund achieved an average annual return of 29.2%, making Lynch a celebrated figure in the investment world. His mantra “buy what you know” summed up his straightforward approach to investing.
Despite his achievements, Lynch emphasized that investing in the stock market is not a game. He expressed concern about the lack of caution people show when investing, often risking large amounts of money on stocks they have heard about in casual conversations without doing thorough research.
“You don't play the market. And maybe I didn't emphasize that enough in the book. It is very important to point out that I did not say invest in the stock market. So the reason I wrote 'One Up On Wall Street' was to help people who wanted to invest,” he said.
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Lynch also noted that while data is more accessible now than it was 35 years ago and trading costs have been reduced, that doesn't mean people should become traders. “That's not investing. That's gambling,” he noted.
“You know, you buy three shares a day and on Friday you sell three, and next week you buy three more. That's not investing. That's gambling,” Lynch added.
For those considering investing, Lynch's advice is to understand the company's story, keep an eye on the fundamentals and follow the story. He also recommended building a $100,000 paper portfolio with at least ten stocks before investing real money to test your investing skills.
