Who Is Peter Lynch?

Peter Lynch is a legendary American investor who built his name as manager of Fidelity’s Magellan Fund. During his 13-year tenure, Lynch averaged over 29% annual returns and increased the fund’s AUM from $18 million to $14 billion. 

Quick facts

Name: Peter Lynch

Nicknames: The Wizard of Wall Street; America’s Money Manager

Date of Birth: January 19, 1944 in Newton, Massachusetts

Education: Boston College

Net worth (as of 2006): $352 million

Partner(s): Carolyn Ann Hoff (1968-her death in 2015)

Investment strategy: Value; mutual fund; “Invest in what you know”

Known for: 

• Averaging over 29% annual returns managing Fidelity’s Magellan Fund between 1977-1990
• Distilling his investment knowledge in novels like including One Up on Wall Street and Learn to Earn
• Popularizing the GARP (Growth at a Reasonable Price) strategy that balances growth and value investing
• Advocating for an “invest in what you know” approach to portfolio building

Notable facts: 

• Coined several well-known investor-isms, including “10 bagger”
• Credited with inventing stock valuation methods like the price-to-earnings-growth (PEG) ratio
• Created the Lynch Foundation with his wife in 1988 to fund initiatives in education, religion, culture, history and health and wellness

Famous quotes: 

• “I’ve found that when the market’s going down and you buy funds wisely, at some point in the future you will be happy. You won’t get there by reading ‘Now is the time to buy.’”
• “If you go to Minnesota in January, you should know that it’s gonna be cold. You don’t panic when the thermometer falls below zero.” 
• “Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it.”

Early life

Peter Lynch gained an interest in investing working as a golf caddy for Wall Street names in his teen years. He attended Boston College on a caddy scholarship where, as a sophomore, he purchased 100 shares of Flying Tiger Airlines. When the price soared over tenfold, he sold shares to fund his education. 

Lynch graduated from Boston College with a finance degree in 1965, then earned his MBA from the University of Pennsylvania in 1968. 

Running the Magellan Fund 

Lynch’s connections forged as a caddy paid off when, in 1966, he was hired as an intern at Fidelity Investments. He worked his way up to director of research by 1974. 

Three years later, Lynch was named head of the Magellan Fund, a small, aggressively-postured mutual fund. With no restrictions (outside SEC regulations) cramping his style, Lynch began researching and snapping up individual companies. 

By the time Lynch resigned in 1990, he’d built the fund from $18 million to over $14 billion AUM. During his 13-year tenure, the fund averaged a 29.2% annual return. 

Investment philosophy

Lynch’s investment strategy stresses evaluating a stock’s underlying business model, competition and growth potential. He believes that a hybrid growth-value approach can yield large returns while using diversification to spread risks. 

Lynch also popularized an “invest in what you know” philosophy, which holds that investors should focus on companies they’re familiar with. He believes that investors can find local opportunities before Wall Street grows wise – and that greater familiarity helps investors develop more reasonable expectations.  

But he also warns against market timing, observing that, “Far more money has been lost by investors preparing for…or trying to anticipate corrections than has been lost in the corrections themselves.” 

Legacy 

Lynch has co-authored three novels on investing:

• One Up on Wall Street, which teaches investors to use what they know to find success
• Beating the Street, which details Lynch’s strategy to find solid investments
• Learn to Earn, which guides beginners through the world of investment reports

Today, Lynch continues his work mentoring young analysts and focuses on “philanthropy as investing.”