investing Principles by Peter Lynch

Peter Lynch is one of the great investment managers of all time. He managed the Fidelity Magellan Fund for 13 years with assets under management rising from $20 million to $13 billion by the time Mr. Lynch retired. Under his managment the fund returned an average of 29% per year for 13 years. If you invested $10,000 in Magellan Fund when Lynch took over managment it would have grown to $280,000 13 years later. Mr. Lynch is also famous for introduction of PEG. PEG is a ratio he used to determine if a stock was cheap, why'll keep growth in mind. The PEG ratio is determined by the dividing the company's P/E ratio by the historical growth rate. According to Mr. Lynch the faster the company grows, the higher the P/E ratio you should pay for that company. He wrote two best-selling books that every investor should read, whether they are growth investors or value investors.