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Peter Lynch (born January 19, 1944) is a successful Wall Street investor, and arguably one of the best stock-pickers in the world. He is currently a vice-president at Fidelity Investments.
Before being hired as a stock analyst for Fidelity, Lynch served for two years in the United States Army and studied at Boston College and finance at the Wharton School of the University of Pennsylvania.
Lynch was given the $20 million Fidelity Magellan Fund to manage in 1977, and under his direction it grew to eventually be worth over $14 billion by 1990, when he retired. The fund averaged a staggering 29.2% return a year, and only underperformed the S&P 500 index twice. His biggest investing successes included "discovering" undervalued companies such as Taco Bell and Pier 1 Imports before periods of strong growth.
After he retired he wrote two popular books on stock picking, Beating the Street (ISBN 0671891634) in 1994 and One Up on Wall Street (ISBN 0743200403) in 2000. Both are considered required reading for any serious investor.
Peter Lynch's most famous investment principle is simply "Invest what you know," popularizing the economic concept of "local knowledge." This simple principle resonates well with average non-professional investors who don't have time to learn complicated quantitative stock measures or pore over financial reports. Since everyone tends to become an expert in certain fields, applying this basic "invest what you know" principle helps individual investors find good undervalued stocks. Peter Lynch uses this principle as a starting point for investors. He has also often said that the individual investor is more capable of making money from stocks than a fund manager, because they are able to spot good investments in their day-to-day lives before Wall Street becomes aware of them.
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