Peter Lynch Was Right

  • Post category:Recap
  • Reading time:3 mins read

It was indeed the beginning. The book truly provided me with much more insights than I bargained. I was introduced to Benjamin Graham, Peter Lynch, Ken Fisher, Joel Greenblatt, and their respective frameworks.

I was hooked, and I wanted to gather all the knowledge I could. Since then, I have never stopped reading investments books. The next couple of books, including “The Intelligent Investor,” “One Up on Wall Street,” “The Dhando Investor,” introduced me to Stock Markets in an absolute sense.

I was getting a lot of information, but I wasn’t converting that into knowledge. Any article regarding anything, i.e., Market Crash, Stock is super overvalued, The stock is cheap but is a value trap, Why I should invest in ABC company & why I should not invest in ABC left me more desperate to search for answers. I wasn’t going anywhere because anything I read was impacting how I invest.

As I was still curious to find answers and unlock the secrets, I searched for them inside books hoping to get a silver bullet. Which, of course, I now know doesn’t exist. I even created a software application to help me with the math formulas learned from “The Guru Investor.” That, in turn, gave me knowledge about basic valuation techniques.

By now, I knew a bit about valuations, What’s PE, PS, Revenue, Income earnings, etc. I could at least find a couple of items on companies financial report. If the trend was upwards, all was good for me. I moved away from making decisions based on price charts to look at income, revenue, debt, earnings & PE (somewhat more logically).

With a bit of help from Monthly fool and FB stock, I was doing Okay. Amidst all the reading and investing, It was time to retrospect.

I knew I had 15 securities in my Indian account. It had been ten years & it was time to check how they were doing and see if I could learn things from it. Three companies I owned went bankrupt. 2 of them traded way below my purchase price at an 80% loss. Seven of them were at the same price or doubled. My father chose three of them, i.e., Maruti was trading at 14X, L&T 5X, HDFC bank 6X. Even after the duds like Adlabs, JP Associates, Suzlon, etc., my portfolio overall was very healthy.

I knew Peter Lynch was right. I just needed 2-3 winners out of 10 to make a difference.