Collection: Peter Lynch - #14 'Investing Advice For Beginners'

[Transcript]

CHARLIE ROSE 00:00

The other thing is what advice would you give to young investors who almost certainly will have more direct responsibility for their retirement savings than their predecessors of which I've been talk about lately.

PETER LYNCH 00:09

Well, I think the advantage of putting money into a retirement fund. Obviously a Fidelity Fund I would prefer, but an Index Fund, whatever it is, put some money aside it's going to compound tax free.

CHARLIE ROSE 00:20

Yes.

PETER LYNCH 00:20

If you start saving early and the numbers are amazing.

CHARLIE ROSE 00:22

Compound will do wonders won't it?

PETER LYNCH 00:23

It's amazing. But until you want to invest directly in individual stocks, start a paper portfolio. Say I'm going to buy these ten companies and then write down in like five bullets why.

What's the reason I bought those? And then keep checking a year later. What happened? Did they really keep growing or did a competitor come along? Do a paper portfolio. You can do exactly what I did with a real portfolio and find out what am I good at? What am I bad at am I really good at turnarounds and am I good at small growth companies?

Maybe I paid too high for stocks. You can do this very – you can do this over four or five years and learn what your skills are and then specialize that. I had owned thousands of companies. All you need is a few in a lifetime.

CHARLIE ROSE 01:00

Yeah.

PETER LYNCH 01:00

To make a difference.

(Source: https://charlierose.com/videos/17771#)

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[YAPSS Takeaway]

1. Set money aside and invest. Let the compound over time.

2. Write down the reasons you buy the stocks and check it a year later.

3. Keep track of your portfolio to find out what you are good and bad at.

Just as Charlie Munger said "I think you find out whether you got the qualities to win at poker by playing poker."