Video Link: https://youtu.be/iml1SGDa8ZQ
In this episode, Peter Lynch was asked does he still believe in the investment mantra that he was often credited as his mantra which is "invest in what you know?"
In this episode, you’ll learn:
Peter Lynch's investment mantra.
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CHARLIE ROSE 00:00
You still believe in the investment mantra that you were often credited as your mantra which is invest in what you know?
PETER LYNCH 00:07
I mean it's just something – imagine you spent – you've a long time in your field. And my field – imagine if you're in a mall the last 30 years. You would have seen the GAP, you would have seen Best Buy, you would have seen Circuit City. You would have seen these companies are crowded and doing something better.
And they are buying biotechnology stocks for oil companies, that makes no sense to me. If you're in the steel industry and you see it go from awful to better. Why don't you buy steel stocks?
CHARLIE ROSE 00:28
Yes but we expect mutual funds, you know, that stuff. You know obviously if you're managing.
PETER LYNCH 00:31
Well but they're ahead of us.
CHARLIE ROSE 00:32
I mean you know if you look at Magellan or you look at Black Rock you think they must have access to the best information in the world.
PETER LYNCH 00:40
But they don't have – they're not in the steel industry. They don't see things get better – you know the way – they don't see the chemical industry turning as soon as the people in chemical industry do. I mean it can be in the plastics field or lithium whatever it is –
CHARLIE ROSE 00:52
People in the business see it first.
PETER LYNCH 00:53
They see it first.
CHARLIE ROSE 00:56
PETER LYNCH 00:56
In a mall imagine the companies you've seen; Dunkin' Donuts, it goes on and on. Wal-Mart, you know Stop & Shop, these are all companies that really got better.
And you're saying gee, I'm shopping there. I'm not saying people should – if they want to invest, they ought to do the same kind of research they do when they buy a refrigerator, take your trip daily, do some homework.