์๋ฌธ ๋ณด๊ธฐ
Hello. Today we are going to talk about an investment guru who opened the doors of the stock market for common people. Peter Lynch. Yes, Peter Lynch and his book Beating the Street. Hmm, I hear there's a lot in it for the average investor. So let's talk about this in a little more depth today. Absolutely.
Lynch's basic principle is very simple that the stock market is not rocket science. Anyone can find good investment opportunities by looking around them in their daily lives. Yes, that idea of โโhis is very famous. Invest in what you know. Meaning if there is a coffee shop where there is always a line.
Yes, or the children are crazy about some particular toy. Absolutely or is there any app that everyone is using these days. So just find out a little bit about that company. This could be a good start, right? You are right. And that's what makes investing so easy. Meaning it doesn't scare. Yes, otherwise I don't know what all I will have to understand.
And look, these are not just words. Lynch proved it himself. Would you believe that he invested continuously for 13 years in his Magellan Fund ? How much? Average annual return of 29.2% every year. Oh my God, 29.2%, this is amazing. Yes. So beating the street means consistently beating the market. And how did he do this?
By doing your own research and understanding the companies and the noise that is created in the media every day. Yes yes buy this, sell that. By completely ignoring him. This is a big thing. Well, I also heard that he did not weigh all the stocks on the same scale. He had created some categories etc.
Absolutely. This was his speciality. To understand the stocks, he broadly divided them into six parts. Okay, which ones? See, the first one is Slow Growers. These are big old companies that grow slowly. Most of the dividends given are of safe type. Like us, maybe some big government companies or old industries.
Something like that. Then come the Stalavs. These are also very strong companies. But they grow a little faster than slow growers. Think like some well-known FMCG or big IT companies are trustworthy. Ok? And then again come the real race horses, the fast growers. These are often small, new companies that can grow very quickly.
This is where one can expect to find multibaggers, i.e. shares that give multiple returns. But then there will be more risk in these. Yes absolutely. Risk and reward go hand in hand. These are three categories. And what are the other three? The fourth is cyclicals. Their business fluctuates with the economy.
Like auto, cement, steel sector. If the economy is good then this is good, if the economy is bad then this is also sluggish. Well, that means timing will have to be seen in these. To some extent? Yes. Fifth is turnarounds. These are the companies which were in trouble earlier, but now it seems that they may get back on track.
You can make a lot of money in these too if your guess turns out to be correct. And the last sixth is Asset Place. In these the company has some hidden value. Suppose there is some valuable land or a brand whose value is not yet reflected in the share price. The market has ignored it. Wow, that means every stock has its own character.
It is very important to understand this. Absolutely. Only then will you have the right expectations and be able to make the right strategy. This is where his homework theory comes in. Yes, homework means do your own research. Lynch used to say that buying shares without research is like betting without looking at the cards.
Yes yes that is correct. Homework means read the company's annual report. Understand what the company does? How does she earn money? How is the management? How much is the debt? Who is the competition? Hmm. Meaning not to buy a kipper just by hearing the name. Not at all. He also asked to see some basic things.
Like the debt on the company should be less than its equity, its earnings i.e. EPS should be continuously increasing, return on equity should be good, say above 15%, all this has to be seen. And with this homework, you get those 10 bagger shares which become 10 times. Yes, this is the hope but see, it is not easy.
For this, one has to quickly identify a good fast-growing company. Hmm. And then the most difficult thing is to be patient. This is not a get rich quick scheme for long term years. You are right. Patience is perhaps the biggest need in the stock market. So this means that whatever keeps running on TV every day.
The market rises as much as it falls, one should stay away from that noise. Lynch was absolutely clear: do n't try to time the market. Guessing whether the market will go up or down tomorrow is a futile exercise. No one can do it. So what to do then? Time in the market is essential. Meaning, invest money in good companies and stay in them for a long time.
Stay tuned. Good. Meaning buy and forget. Don't forget, keep an eye on it. But don't be afraid of the daily ups and downs. Patience is the only way the magic of compounding works. Investing slowly and consistently, like through SIPs, is often more beneficial. And those mistakes you mentioned that should be avoided.
Yes, Lynch warned about some common mistakes. One is herd mentality. If everyone is buying then I should also buy it. If everyone is selling then I should also sell it without doing my research. Yes, this happens a lot. Second, panic selling. As soon as the market fell a little, even good shares were sold out of fear.
Whereas a decline could be an opportunity to buy. That's correct. And one more thing is excessive diversification. You have bought so many shares that you are not able to pay proper attention to any of them. Lynch used to say that it is better to understand a few good companies and invest in them rather than investing small amounts of money in dozens of companies about which you do not know anything.
We mean focus on quality, not quantity. Absolutely. And above all, emotional discipline, not letting fear and greed dictate your decisions. Stick to your strategy. So, if we sum it all up, Lynch's message is very powerful and simple. Logic, patience and your research. If these three things are there then any common man can be successful in the market.
perfect. Look for opportunities around you, understand the companies, do your homework and think long term. These are the main things. Yes, and this is not just bookish talk. It is equally useful even today. This is timeless wisdom that will always be relevant. Absolutely. So I leave a question for the listeners.
Look at it in your daily life today. How to use the principle of what you know. Next time you buy something, use a service, or see a crowd somewhere. Just stop and think. Who knows, your next investment idea might be hidden there.
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