Investing the Peter Lynch way

From 1977 to 1990, Peter Lynch, while managing the Fidelity Magellan fund in the US, generated an annualised return of 29.4 per cent, making it the best performing fund in the world. This performance made Lynch a legend in the world of investments, but what truly cemented his role for posterity was the books and articles he wrote about equity investing. One Up on Wall Street After all, the money he made for Magellan investors for two decades benefited only those investing in it. His writings, on the other hand, benefited many more, and continue to do so even now. Certainly, my own education in equity investing owes a great deal to an early introduction to Peter Lynch's ideas! Peter Lynch's classic, of course, is the great book One up on Wall Street. Along with his other books, Beating the Street and Learn to Earn and his various articles, Lynch should be read by every investor. As you can probably tell from the titles alone, Lynch firmly believes that ordinary individual investors, by using the information they have access to in their daily lives, can do better than professional investors and fund managers. For a fund manager to espouse this idea is remarkable. In a somewhat analogous way, despite Value Research being India's premier mutual fund research organisation, our new Value Research Stock Advisor service is based on the firm belief that for a certain class of committed investors, investing directly in equities makes sense. However, there's a lot more to Peter Lynch in terms of ideas than just that. The other day, I came across one of the articles he wrote for Worth magazine in 1997. It's a long article, covering a lot of ground and should be read closely by anyone investing in stocks. This article, 'Use Your Edge', starts with Lynch describing the idea: Amateurs can beat the Street because, well, they're amateurs. At the risk of repeating myself, I'm convinced that this type of failure is unnecessary -- that amateurs can not only succeed on their own but beat the Street by (a) taking advantage of the fact that they