Peter Lynch - Long Term Stock Tips

Long Term Stock Tips


Peter Lynch was a revolutionary fund manager, has a truly incredible stock picking strategy and has written several books on investing, all of which we recommend. The following tips are taken from his book 'One up on Wall Street'- highly recommended.


This is a condensed version of my article When to buy Stocks.


 Peter Lynch's tips on picking stocks. Invest if:

1. It sounds dull -- or, even better, ridiculous;
2. It does something dull;
3. It does something disagreeable;
4. It's a spin-off;
5. The institutions don't own it, and the analysts don't follow it;
6. The rumours abound: It's involved with toxic waster and/or the Mafia;
7. There's something depressing about it;
8. It's a no-growth industry;
9. It's got a niche;
10. People have to keep buying it;
11. It's a user of technology;
12. The insiders are buying, and;
13. It's buying back shares.

Such rules led him to buy Automatic Data Processing (payroll processing), Taco Bell (restaurants), La Quinta (motels), Cork Crown and Seal (can and bottle cap manufacturing), Seven Oaks (retail coupon processing), Safety-Kleene (waste disposal) and Service Corporation (funerals).

They were all great buys. Not hot stocks. You decide which you prefer.

When does Peter Lynch actually buy?

"Find the long-term growth rate (your guess is as good as mine), add the dividend yield, and divide by the P/E ratio. Less than 1 is poor, 1.5 is okay, but what you're really looking for is a 2 or better. A company with a 15 percent growth rate, a 3 percent dividend, and a P/E of 6 would have a fabulous 3."


(Taken from his book 'One up on Wall Street')




Hope that helps people!

Robert Kiyosaki How to become wealthy- Providing and Producing.

Robert Kiyosaki How to become wealthy- Providing and Producing.

Producer/Provider vs Consumer

Which are you? Are you a provider, producer or consumer? Most of us are a mix of the three. I talk about this purely in its financial meaning. Do you produce goods, provide services or mostly consume?

When I was younger I used to dream about starting work and when I finally did I did what any future master of his own financial and non-financial destiny would do. I saved the income I was producing. Then, unfortunately, I spent it on the things I wanted to consume. I bought videos, tons of videos, those were things that I was interested in. Could you blame me? Do I blame myself? Well,  I forgave myself. What happened to the videos? I actually gave them to charity! (the businessman in me ought to have sold them on ebay or something...)

In fact, it took a few more lessons in financial management, it took spending. spending, and more spending plus debt and other such minor mishaps for me to come about to the thoughts that I am currently typing.

How did I get myself into this mess? Well I could blame it all on myself, but I won't. I was sold an idea that, at least as a young teen, that having 'things' was good. Back then there was no 'apprentice' on tv, nothing like Donald Trump or Alan Sugar or Duncan Bannatyne promoting businesses on television. Or if there was nobody watched it.

Either way I was spending. I had collections. Collections I was proud of. A video collection. A CD collection. Clothes. And later an expensive vinyl collection (that was eventually stolen, a whole different story!). Either way I had things that I was proud of.

What do I do now? I do things a little differently and if the above story sounds anything like your good self then maybe carry on reading.

Addressing the balance from Consumer... to the next level!

 The balance. Life is about balance.

Instead of consuming so much,  try to produce and provide. Instead of going to buy things that make you feel good, how about just feeling good?

How do you do that?

Producing and providing is a natural high. I provide language lessons (one to one over Skype if you are interested get in touch with me here) and produce videos to help others. This provides me with such a buzz, it far outweighs the feeling of possession I used to have over my possessions.

The other thing is that if you have collections and other valuable possessions that are irreplaceable, they are vulnerable, and so are you. What would happen if they were stolen? This happen to me. I should know. a lot of my musical equipment was stolen. I'd saved for years for it.

So what did I do? What should you do?

Well I guess that if you are reading this blog then you have an interest in both saving money, business and possibly improving yourself too. In that case,  working on products you can produce or services you can provide can give much more than hoarding possessions. Plus you gain money, not lose it.

Robert Kiyosaki, of Rich Dad Poor Dad fame, tells people to think of anything they spend money on as either an asset or a liability. In quick terms anything that produces money is an asset and anything that costs money is a liability. This is quite basic stuff,  and I'm sure many of you are aware of this, however some aren't, or some have forgotten. Clothes, fashion, music and dvd collections do not produce anything.

The customer, or consumer, consumes them.

So something you can do in your own life is a tally. Tally up the things in your life that produce income and things that do not.  This is also a great way to discover ways of making money, finding profitable uses for your things.

10(ish) Money Making Examples:

1. Using your expensive camera to learn Photography and potentially generate a future side income

2. Using your car to do deliveries of post/or sales materials

3. Using your car as advertising for your business, or someone else's business

4. Renting out the garage or drive way

5. Renting out one of your spare rooms

6. Using your living room as a makeshift restaurant- pop up restaurants are popular in cities in the UK

7. Use your music to make mix tapes and sell them on iTunes

8.

9.

10.

The last 3 I want you to complete in the comments box. Give inspiration to the hundreds of readers that read this blog! You never know your next income stream might come from the comments box!

Thanks Folks!