It's the weekend!
Grab a cup of coffee, in this thread I will explain
1. Peter Lynch's Six Categories of Stocks
2. How to identify the type of stock you own?
3. How to think and decide about the runway for growth of a company?
Lets dive right in.
For those who do not know (I doubt there will be many), Peter Lynch is one of the most successful fund managers of all time.
He managed a fund called Magellan at US Investment Giant Fidelity Investments and during his 13 yr tenure, he delivered an average CAGR of 29.2%.
Sadly the fund couldn't keep up post Lynch's retirement and his successors weren't able to keep up with his returns.
That's how good Lynch was!
In 1989, a year before retirement, Lynch wrote and published a book called 'One Up on Wall Street'.
Almost 32 years later, the teachings of the book remain relevant.
(Highly recommended read)
Chapter 7 of the Book Titled
"I've Got It, I've Got It - What is It?"
talks about the need to classify stocks.
Peter's argument is that you need to know what kind of stock you hold in your portfolio.
Not all stocks are the same - and he is right!
