Collection: Peter Lynch - #20 'You Have Plenty Of Time, Don't Rush To Buy Stocks'


Video Link: https://youtu.be/c1NEIEvP1WQ


In this episode, Peter Lynch use Walmart and Microsoft as an example to illustrate why you shouldn't rush in and buy stocks.


In this episode, you’ll learn:

  • Why you shouldn't rush in and buy stocks?

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[Transcript]

(Source: https://www.c-span.org/video/?60722-1/us-economic-investments)

PETER LYNCH 00:00

Another key element is that you have plenty of time. People are in an unbelievable rush to buy a stock.


I’ll give you an example of a well-known company. Walmart went public in October of 1970. 1970 went public, already had a great record, it had 15 years’ performance, great balance sheet.


You can wait 10 years saying you’re a conservative investor and you’re not sure if Walmart can make it. You want to check. You see them operate in small towns. You’re afraid. They make it in seven or eight states. You want to wait until they go to more states. You keep waiting. You could have bought Walmart 10 years after it went public and made 35 times your money.


If you bought it when they went public, you would have made 500 times your money, but you could have waited 10 years after it went public and made over 30 times your money.


You could wait three years after Microsoft went public and made 10 times your money. If you knew something about software, I know nothing about software. If you knew something about software, you would have said, “These guys have it. I don’t care who’s going to win, Compaq, IBM. I don’t know who’s going to win, Japanese computers. I know Microsoft, MS-DOS is the right thing." You could have bought Microsoft.


Again, I'm repeating myself stocks are not a lottery ticket. There’s a company behind every stock, and you can just watch it. You have plenty of time, people are in an amazing rush to purchase a security. They’re out of breath when they call up. You don’t need to do this. (Laughter)

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