Peter Lynch: How to Invest Better Than Wall Street (Rare Interview)
Summary
TLDRIn this interview, Peter Lynch, renowned money manager and author of 'One Up on Wall Street,' discusses his new book 'Beating the Street.' Lynch emphasizes the importance of understanding one's natural advantages when investing in stocks and advises against gambling on unfamiliar companies. He shares his philosophy of investing in what you know, using personal anecdotes and examples like his wife's discovery of a superior product. Lynch also touches on the importance of encouraging investment and job creation through policies like lower capital gains taxes and less regulation, and he offers insights into the economic plan of President Clinton, advocating for a balanced approach to taxation and spending.
Takeaways
- π Peter Lynch, known as America's top money manager, emphasizes the importance of understanding one's natural advantages and using them wisely in investing.
- π Lynch's success with the Fidelity Magellan Fund highlights the value of expert stock picking and the potential for maximizing profits through informed investment strategies.
- π¨βπ©βπ§βπ¦ Lynch's personal decision to step back from managing funds to spend more time with his family underscores the balance between professional success and personal fulfillment.
- π His book 'Beating the Street' offers practical advice on stock selection and profit maximization, aiming to empower individual investors.
- π Lynch points out the irony that while people are often deterred from activities they perceive they are not skilled at, the same does not apply to stock market investments, where many participate despite a lack of understanding.
- π‘ He advocates for a simple yet effective investment philosophy: if you can't explain a company's value proposition to a 10-year-old, you probably shouldn't invest in it.
- ποΈ Lynch discusses the potential of retail and consumer goods companies, suggesting that understanding the products and services one uses daily can provide a solid foundation for smart investing.
- π He provides examples of companies that have shown significant growth, illustrating how focusing on a few good stocks over a lifetime can yield substantial returns.
- π’ Lynch argues against the common practice of investing in industries one is not familiar with, suggesting that leveraging one's own industry knowledge can be a significant advantage.
- π He touches on the broader economic context, including discussions on tax policies, government regulations, and the importance of fostering an environment that encourages investment and entrepreneurship.
Q & A
What was Peter Lynch's role at Fidelity Magellan Fund?
-Peter Lynch was the manager of the Fidelity Magellan Fund, which was a top-ranked general equity mutual fund during his tenure.
Why did Peter Lynch decide to quit his job managing money?
-Peter Lynch decided to quit managing money to spend more time with his wife and children, as he was working long hours and traveling extensively.
What did Peter Lynch do after reducing his work hours?
-After reducing his work hours, Peter Lynch spent more time with his family, made breakfasts and lunches for his kids, and got involved in charity work, particularly focusing on inner-city schools, libraries, and housing.
What is the main advice Peter Lynch gives to people about investing in stocks?
-Peter Lynch advises people to invest in what they know and understand, emphasizing that if they can't explain a company's business to a 10-year-old in two minutes, they shouldn't invest in it.
Why did Peter Lynch write 'Beating the Street' after already writing 'One Up On Wall Street'?
-Peter Lynch wrote 'Beating the Street' to further explain the advantages individuals have in stock investing and to encourage people to invest on the right basis, noting that the percentage of people's assets in stocks had decreased since the publication of his first book.
What is Peter Lynch's view on the importance of understanding a company's fundamentals?
-Peter Lynch believes that understanding a company's fundamentals is crucial for investors. He suggests that if investors cannot understand what a company does, they should not invest in it.
How does Peter Lynch feel about the capital gains tax and its impact on investment?
-Peter Lynch is against high capital gains taxes, arguing that they discourage people from investing. He mentions that countries like Japan have much lower rates, which are more encouraging for investors.
What does Peter Lynch think about the role of government in regulating businesses?
-Peter Lynch acknowledges the need for government regulation to protect consumers and employees but criticizes excessive regulation that can stifle business growth and innovation.
What is Peter Lynch's opinion on the economic policies of the Clinton administration?
-Peter Lynch supports the Clinton administration's focus on reducing spending and increasing investment, but he is critical of high taxes on unearned income and advocates for a reduction in capital gains tax.
How does Peter Lynch suggest that individuals can leverage their natural advantages in the stock market?
-Peter Lynch suggests that individuals should invest in industries they are familiar with, such as their own profession or local businesses, to leverage their knowledge and understanding of those sectors.
Outlines
πΌ Peter Lynch's Investment Wisdom and Life Transition
Peter Lynch, renowned as America's top money manager by Time Magazine, discusses his career at the Fidelity Magellan Fund and his decision to retire to spend more time with his family. He emphasizes the importance of understanding one's natural advantages in investing, such as familiarity with certain industries or products. Lynch also talks about his new book, 'Beating the Street,' which offers advice on stock picking and profit maximization. He shares his personal experience of reducing work hours to focus on family and charity work, including his involvement with inner-city schools and hospitals. Lynch's philosophy on investing is highlighted, where he stresses the correlation between a company's earnings and its stock performance over time, advocating for investment in what one knows and understands.
π The Importance of Industry Knowledge in Stock Investments
In this segment, Peter Lynch elaborates on the significance of industry knowledge for investors, suggesting that people often fail to capitalize on their natural advantages. He criticizes the common practice of investing in unfamiliar sectors, such as someone in the restaurant industry buying biotechnology stocks. Lynch advocates for investing in what one knows, using examples of successful investments in the restaurant industry like McDonald's, Dunkin' Donuts, and others. He also discusses the unpredictability of economic factors like interest rates and the economy, and how these factors are often overemphasized in stock market decisions. Lynch shares his experience of working with younger analysts and his views on the Clinton economic plan, advocating for policies that encourage investment and job creation.
πΌ Peter Lynch's Views on Economic Policies and Corporate Strategies
Peter Lynch shares his views on economic policies, particularly the need for lower capital gains taxes and reduced regulations to encourage business growth and job creation. He criticizes the high capital gains rate in the U.S. and suggests that it hinders investment. Lynch also discusses the importance of consumer protection and the role of government in breaking up monopolies, using IBM as an example of a company that lost business due to technological shifts and market changes. He suggests that IBM needs new strategies and possibly a new leadership direction to adapt to the changing technology landscape. Lynch also touches on the success of Microsoft and Bill Gates, highlighting the importance of being in the right place at the right time with the right product.
π Global Economic Outlook and Lynch's Stock Picks
In the final paragraph, Peter Lynch discusses his outlook on the global economy, predicting an upturn that would benefit cyclical stocks in industries like paper, aluminum, and steel. He suggests that these industries, having cut costs, are well-positioned to profit when the economy improves. Lynch also mentions specific companies he finds interesting, such as OBA Pan, a food company, and Jay Baker, a retailer, indicating that he prefers companies he can understand and that have room for growth. He concludes with a general advice to investors to look for companies that are on the right track and have created good businesses, without explicitly recommending to buy these stocks.
Mindmap
Keywords
π‘Natural Advantages
π‘Stocks
π‘Mutual Funds
π‘Investment Clubs
π‘Earnings
π‘Recession
π‘Capital Gains Tax
π‘Regulations
π‘Deficit
π‘Cyclical Stocks
π‘Economic Stimulus Package
Highlights
People often fail to recognize and utilize their natural advantages, which is detrimental.
Individuals tend not to engage in activities they believe they are not skilled at, such as ice skating or playing the cello, yet they still venture into stock market investing without hesitation.
Peter Lynch, known as America's top money manager by Time Magazine, shares his insights on managing the Fidelity Magellan Fund and his book 'Beating the Street'.
Lynch emphasizes the importance of understanding one's own industry or local businesses when investing in stocks.
He discusses his personal decision to leave his high-pressure job to spend more time with his family and engage in charitable activities.
Lynch's philosophy is that if you understand a company and its products, you can make informed investment decisions.
He argues that there is a direct correlation between a company's earnings and the performance of its stock over time.
Lynch advises against investing in companies or industries that one does not understand.
He shares his experience of cutting back work hours to focus on family and charity, while still maintaining an office at Fidelity.
Lynch's view on the Clinton economic plan, advocating for more investment and less spending, aligns with his investment philosophy.
He expresses concern over the high capital gains tax rate in the U.S., suggesting it discourages investment.
Lynch believes that small businesses are the primary job creators and that government policies should encourage entrepreneurship.
He discusses the challenges faced by IBM and the rise of Microsoft, highlighting the importance of adapting to technological changes.
Lynch shares his thoughts on Ross Perot and the impact of political decisions on the economy.
He provides examples of companies he finds interesting, such as Au Bon Pain and Jay Baker, without explicitly recommending them as investments.
Lynch concludes with his belief in the cyclical nature of the economy and the potential for certain industries to improve.
Transcripts
people don't understand their natural
advantages
and they don't use them so that's that's
bad number one
but worse number two is they don't if
you don't think you're a good ice skater
or if you're convinced you're not a good
cellist
you're not going to try it but people
are buying stocks anyway
they're not discouraged they just think
it's a gamble
we begin with peter lynch time magazine
has called him america's number one
money manager
during the 13 years he headed the
fidelity magellan fund it was a
top-ranked general equity mutual fund
his new book beating the street offers
advice on picking stocks and maximizing
profits
and he's here to talk to us about a lot
of things including
his own dramatic decision uh what four
or five years ago peter welcome to the
broadcast
four five years ago you just said and
i've been managing all this money i'm
gonna do
i'm gonna quit i'm gonna yep that's
right and what and you went to do what
well actually i want to spend more time
my wife and my children right
and it was an interesting situation
because i loved my job i adored my job
and i liked outside activities and when
i was young
you know i didn't wasn't involved in
charity work until i was 30. yeah no
activities
younger children you just read them a
book and a good night moon and they fall
asleep and it's all over
when they get older this is more time
involved so i enjoyed the family
i was i was leaving for work at six in
the morning i was getting home at seven
o'clock at night six days a week this
was in boston yeah
traveling 14 days a month it was just
too much so i said
you know i i said that's it i can't take
it and fortunately i had made enough
money to say
i could give up the jobs i didn't have
to give up the family or the outside
activities
and so what happened then so you did
what with your well i cut back from
about a
80 a 90 hour a week to 40 or 50 hour
week and i
in the morning i make breakfasts and
lunches for the kids and i do the
spelling words and the spanish words
carolyn does the math and the science
and i uh see carol in the morning and
off i go to a place you have to go to my
opinion you have to go somewhere to do
something if you stay at home you
want to be answering the telephone or
watching cartoons oh yeah it's like
falling asleep taking a nap so she does
the hard work can i go i go fidelity
gave me an office i have a secretary and
i spend
majority of the time working on charity
things like inner city schools inner
city libraries inner city housing
you know helping people manage their
money or no not at all
just i'm some of the charities i'm on
the investment committee of some of the
museum of fine arts the you know i'm
involved in mass general hospital
boston college but united way but all
the extra things i added to were real
hands-on actually being involved in
charitable activities
you wrote a book called one up on wall
street and i think that's one of the
best-selling books ever about wall
street if i'm not correct you can
correct me
and so so why then did you write another
okay okay
first of all i was very lucky i wrote it
with john rothschild he was made he made
a big difference so he but
i think the reason i wrote it is the
firs i try to explain to people their
great advantages their edges they have
and that they should get involved in
stocks right and they should do it on
the right basis on the first book
right yeah and obviously i didn't make a
great impression because the percent of
people's assets
involved in stocks has gone down in 1960
people had 40 percent of their financial
assets including their house
and stocks and mutual funds and 80 that
was down to 25
it's now down to 17 and why do you think
that is well i think people
in the decade of the 80s was the best
decade this century for stocks
i think people managed to lose money in
the 80s doing it themselves
because their methods were so flawed so
i i really feel as though
i wanted people to understand i don't
want anybody to buy a stock i'm saying
if you're going to buy a stock
you should do certain things right if
you're not willing to do these things
you should leave your money in the bank
your philosophy is is simple and i'm
remembering this from the previous book
i think we're now talking about the
previous book correct your philosophy
was
if you find something that you
identify with i remember that was the
story of your wife and her hose
your wife
your wife said these are the greatest
things i've ever seen right and when
your wife said that you knew that this
was a product that was better right you
used to stay at la quinta
motel right the service was better
whatever was better the price is good
and the price was good too and you said
this is a place that i can determine
i peter lynch can tell that this is a
good product right
if these people make a good product then
their earnings are going to go up
therefore the stock's going to go up
right
and that's the kind of decision-making
process you ought to go through right
do i have it you've got it exactly right
well i do i don't think people
understand there's a hundred percent
correlation
with what happens to a company's
earnings over several years
and what happens to the stock if the
company mcdonald's has done very well as
a company right
the stock has done very well people
worry about
too much money supply what's happening
the price of oil
who's the president who's being
nominated for the supreme court it's the
ozone layer
it has nothing to do mcdonald's earnings
go up the next 10 years the stock will
go
but what they will say to you peter is
that as you know and why am i telling
you this but
it's fun to tell you this they're
telling you that these other things
influence
the amount of earnings of a particular
company if we're in a recession people
are not going to spend as much money on
going to the movies or whatever they do
and and therefore you got to pay
attention to these other things because
they impact on earth they are very
important but you have no idea of
knowing what they're going to do alan
greenspan is the head of the federal
reserve right
he cannot predict interest rates yes
he'd be the first to influence somebody
can't predict him he cannot predict what
long-term insurance rates are going to
be one year from now two years from now
three years he's even surprised how low
they are now right
so how am i supposed to predict interest
rates how am i supposed to predict the
economy
you certainly remember the recession of
82 yes 1982
with a 20 prime rate 14 unemployment
12 inflation i don't remember anybody
telling me in 1980 or 81 that was going
to happen
all of a sudden we had the worst
recession since the depression i didn't
read about in the paper
so it's crazy to think about these
things here's a quote from you
i own dunkin donuts when you own dunkin
donuts you don't have to worry about
korean imports you don't have to worry
about m2 or m3 these are money supply
figures
and what's happening to the money supply
this is the way you make money if you
don't understand what the company does
you should not be in it
if you could predict the stock market
you could predict the economy you could
predict interest rates
if you go buy the wrong stocks you're
going to lose half your money anyway
right i'm saying people have natural
advantages
yeah let's say what you do for a living
is you're involved in the restaurant
industry right
you supply paper products you supply
kitchen equipment you help build
restaurants right
you saw mcdonald's you saw chi chi you
saw chili's you saw cracker barrel you
saw dunkin donuts kentucky fried chicken
taco bell these are all these stories
these were 40 40 fold you made 40 or 50
times your money
you don't need to make that kind of
money many times your life right no
that's all you had to do was follow the
restaurant industry
people are in industries they're in the
publishing industry they're in the
chemical industry the paper
why don't they just stay within industry
you only need a few stocks a decade
how many good stocks you need a lifetime
instead of people they're in the
restaurant industry
they're buying biotechnology stocks the
people in the campus
the people in the chemical industry are
buying oil stocks it's absolutely absurd
people don't understand their natural
advantages and they don't use them
so that's that's bad number one but
worse number two
is they don't if you don't think you're
a good ice skater or if you're convinced
you're not a good cellist
you're not going to try it but people
are buying stocks anyway
they're not discouraged they just think
it's a gamble yeah so therefore they go
forward
and they they bet on one stock for a
week and a half and it goes up and they
they make two dollars
on it then they sell it and they buy
something else when three years is over
all they've done is generate a lot of
commissions
they've probably lost money that's a
mistake so your advice is what
if you don't understand a company if you
can't explain it to a 10 year old
in two minutes or less yes don't own it
because when it goes down
let's say the stock goes down too you
won't understand what's going on what do
you do do you buy more do you do you
do you flip a chances are your broker
doesn't either you they he
he or she certainly doesn't know about
it i mean who knows what advances what
all these things are at auto backplanes
and megaflops who knows what all these
so buy what you know buy in your
industry buy what you know buy local
businesses
so suppose you you don't have an
industry i mean you know you don't
really
you what you buy company local companies
right come as your own industry
ten years after walmart went public ten
years haven't woken up
ten years after went public it's a 25
year old company now right you could
have bought the stock
and made 50 times your money on it 50
times this is if you bought it 10 years
after after it was public already it
already gone up five-fold
so you could have made 250 fold but i'm
saying let's say you were in a town they
came into it they said
boy these prices are great they're doing
terrific i like the bargains
and you checked it out you spent a
little bit of work on it yeah i mean
people are very careful they when they
buy a dishwasher they do some research
they'll put ten thousand dollars in some
stock they hear on a bus
so if you did a little bit of research
you say walmart's only only 10 percent
of the country
they're not even saturated there why
can't they go to the rest of the country
so
is this this is more of the same is this
it's more of the same plus
i show examples it's it's a touch more
detail this actually shows me an action
action i picked 21 stocks
early in 1992. some work some don't
i follow those companies some of the
companies the fundamentals deteriorate
some they improve i watch those
companies go through the year i also
explain
the retail industry i try to make it
very simple i talk about a wonderful
example
is a seventh grade class yeah the
teacher of that read my book and my
first book that you were talking about
you you and i did a show on that
in washington do you remember that show
this is a long time ago
she read the book and i said if you made
it through fifth grade math
you can do it in the stock market she
says okay she started teaching it in
seventh grade
seventh grade class these kids had to
study companies they had to look at
their balance sheets to see if they're
solvent
and they pick stocks these stocks were
up 69
over two years when the market was up
only 20. they picked stocks like limited
they picked the gap
they picked walter they understood these
companies they also picked ibm i lost
money on that too yeah i mean everybody
makes mistakes but it did yeah but i'm
saying this is
this was this was the school saint agnes
school in arlington mass
but in addition in the decade of the 80s
there's 8 000
investment clubs these are amateurs sort
of right
average people just investing these
investment clubs 62 percent of them
of these clubs beat the market and the
decade of the 80s
only 25 percent of professionals beat
the market let me go back to one other
subject you
after you're coming back to fidelity
aren't you just i'm not going to do
something
when i finish this book i've been
working about one or two days a week the
last year and a half on this book
right now i'm done with the book i'm
going to go back to maybe one day a week
working with the younger analysts just
listening to them
talking to them i'm not telling them to
buy zero zero lifestyle
not totally i'm not going to run another
fund 13 years is plenty of running a
fund
i'm just going to work with younger
analysts let them ask questions i'll ask
them questions it's going to be a lot of
fun
now do you still follow do you manage
any money for anybody other than
yourself no
no i manage money with other people for
some charities
right but no i don't manage anybody's
accounts you're not doing some mutual
funds pension funds no it's nothing i'm
obviously
cold turkey no all right cold turkey
cold turkey
are you happy you did this i mean i was
delighted it's good and you like your
new life oh it's fabulous
let's talk about the clinton economic
plan what do you think of it well i
think his theories are excellent
you know we clearly these theories are
excellent well he claims that we're
going to do more investing and less
spending
right and that statement you can't argue
with less consumption more savings you
absolutely have to
invest more in education you have to
invest more in companies
you have to invest less than just
spending money i mean today people are
encouraged to spend
you spend money let's say you put an
addition on your house
you spend money on that that you can get
a tax deduction because
because the interest on it's tax
deductible if you invest if you take
your money
and put it in the bank you're taxed at a
very high rate they have this incredibly
unfair term it's called unearned income
when you every time i do all the income
taxes
and i fill out the number for what you
made the money you put in the bank is
unearned income what a
it's it's an insulting term anyway if
you
if you buy a stock and you make money on
it you pay a 28
tax on it yeah guess what the capital
gains rate is in japan
uh capital gains rate in japan is 10
zero zero
right i mean we're not encouraging
people to save we're not encouraging
people to invest so you're encouraging
people to speak in favor of the
elimination of the capital gains tax
that bush reducing it or eliminating it
and i'm glad that clinton didn't raise
it i mean he raised other taxes
this fairness thing i understand and
what about this tax the rich business
you you buy that
i think fairness it's a debate what's
fair i think i certainly think
raising taxes is appropriate if it's
same time you cut the spending it's a
lot easier to raise taxes than cut
spending
if we can cut spending and get
government's share of the gross national
product reduced
it'll be fair but our country works very
well
it's working extremely well i mean you
just want it to get spin out of control
you don't buy into the stimulus package
don't buy into that at all you believe
that we don't need to go out and create
jobs charlie
we've had eight recessions since world
war ii we've got out of every one of
them this is number nine
there's nothing unique about the system
we'll get out of this one
in the decade of the 80s the 1980s we
had
18 million jobs in the united states
yeah but as soon as you say that as you
know
people are saying yeah peter but look
what we did when ronald reagan came to
the white house
the deficit was what 70 billion 65
70 billion dollars and now it's
approaching 350 billion dollars right
and the amount of money that we
have to spend to pay off the interest on
that debt is saddling us
and destroying us i agree you're right
i agree with you don't tell me how many
jobs we could now but
you can always create jobs if you're
willing to no no the government didn't
create that
right the 500 largest companies in the
80s
eliminated 3 million jobs eliminated 3
million and we added 18 million
these 2.2 million businesses started 2.2
million businesses started in the 80s
now some of them didn't make it right
but if an average they have 10 employees
today
that's 22 million jobs what the only
thing that creates wealth
the only thing that creates taxes to pay
for all these wonderful things
is jobs there is something magic about
jobs and jobs come from companies start
that's what i should
say small companies creating jobs create
all the jobs right
so that's what i'm talking this is not
voodoo economics this is the real thing
you have to encourage people to take
some risk to put their money out
and go start a business it's a risky
proposition and you do that by what kind
of government policies other than
a zero capital gains or a 10 capital
gains
lower interest what the capital is that
now 20 28 28
plus it's the highest capital gains rate
we've ever had in the history of this
country right it's never been this high
i mean it's terrible how high the
capital gains rate is that's not
encouraging people invest
what you want you want to have lower
sale you want to have lower interest
rates lower paperwork
people start a business now they have
this much paperwork to fill out that's
regulation they go crazy
that's crazy you got to cut that out
yeah well okay but that means something
i mean
a lot of people say without those kind
of regulations then people would be
creating dumping into the rivers and
and not protecting you but these are
regulations it's not protecting the
health of their employees i mean look
what happened down in my home state of
north carolina because of
you know the fire they had down there i
mean people say if you don't have some
kind of government regulation
and companies aren't doing their job to
protect their workers then this is not
the kind of society some of these
regulations relate to the size of your
paper clips
exactly some of this paperwork is
mind-blowing sometimes you can do it
with one piece of paper
one that's right i mean okay that would
be a good policy i think clinton
it really wants to make it work yeah the
capitalist system works
obviously you want to protect the
consumer and business people carry to
extreme
when the oil monopoly and the steel
monopoly that's wrong too i mean
i think trust should be broken up there
is a role for government
ibm what happened to them ibm had a
wonderful business
they used to go to companies like
fidelity chase manhattan
they used to come and explain to these
people how to use computers
yeah they didn't know how to use
computers yeah they went to companies
and it went in with very
talented experienced people ibm's ibm
and explain to people how to use
computers
today all these companies like johnson
johnson's american
bristol miners they have people in the
company already that know computers
backwards and forwards
the same ibm people walk in with these
solutions
they don't need all those people so all
these companies took ibm's business away
from no no they do internally they have
experts internally now that are trained
in it's called now management
information systems they have all these
fancy acronyms
they have skilled people all they want
now is software
and a cheap box they don't need all
these so ibm
was dealing in a system that was very
effective for three or four decades now
the technology has moved to the chip the
technology's moved to the software
it's not the box it's not the storage so
what should ibm do what should this
board of directors of ibm which is
looking for a new chief executive
officer what should they be looking for
well a lot of people saying they ought
to just mark myerson the number two guy
to ross perot down there said maybe they
ought to dismember the thing
or maybe they ought to create all kinds
of little entrepreneurial companies from
within
break it up they'll eventually they have
incredible technology
they're very skilled they have a lot of
determination right now unfortunately
it's sad they have too many employees
they have too many factories they try to
do it all themselves
they're they're they're working the
right direction there's nothing wrong
with the direction they're going they
will turn it around
if they're in a hard process because the
technology is advancing all the time
what was the genius of bill gates and
microsoft
which now has a higher net worth than
ibm doesn't it well he there's a lot of
bright people he said oh my god
his net worth alone might be more than
ibm's profits
individually yeah his brilliance is a
lot of brilliant people
and a lot of luck ibm adopted ms-dos
as the operating system right they
rushed the market with the first
computer they needed an operating system
and he had the only one if they'd wait a
couple years they could use their own
so ms-dos became the basic operating
system of every computer whether it was
a
compact computer the only computer
system that didn't use it was apple
apple had their own operating system
so every computer that went out there
all over the world needed ms-dos he uses
use that to come along with windows so
he was there he was like the gasoline
when people whatever car if you had all
if you had if you're the rights to all
the gasoline you don't care whose cars
are said another way i mean ibm was
making all of these
razors and and he was making all the
razor blades you got it right yeah
absolutely and there were other people
making races to use his blades
exactly so he had all the razor blades
around
no obviously he's a bright person and
rich yeah
and eds eds you know ross perot what do
you think of pearl
i think he's a well-meaning talented guy
guys done a lot of good things in
education
for president i did you did yeah perot
was your guy yep i sure didn't why
well it was sort of a protest vote
exactly because i know in our state
you know i mean in our state that's just
yeah i know in massachusetts
the democrat was going anyway and i
really thought his concepts of cutting
down on the deficit and more investment
oh cutting down deaths is a good idea
oh it's absolutely a good idea it's a
terrific idea give me five good stocks
to watch not to buy but just to watch
five
ideas that you think where people are
really on the right track and created a
good business well
i think not touting stocks america i
just want to know what peter likes okay
well we have a company in boston called
oba pan
it's a company that makes croissants and
they make breads and they
have a state-of-the-art bagel they're
working on i can understand that company
me too
they're only in about 20 percent of the
country they're starting to roll
right now it's i think you know the
price is fully priced and i think now is
the times
selling for what's fully priced oh i
mean it's 25 times next year's earnings
i mean that's very high right but i
think over a long period of time
i'm hoping the market goes down and the
stock will go down and i'm going to back
up the truck and buy a lot of shares
i think now is the time to look at
cyclical stocks i think the economy
is going to get better around the world
in 94. it's already getting better in 93
and it's
even better in 94. better in 94 because
right now it's slumping in germany and
it's slumping in japan
right so i think now is the time to look
at cyclical companies
in the paper industry the aluminum
industry the steel and see they've cut
the cost
they're the lowest cost producers in the
world and when things get better they're
going to make a lot of money what are
these little small companies we should
look at
oh there's tens of thousands a small
company well i
i guess i'd say all about bands the
smaller part another one would be jay
baker is a relatively small
they do it's a retailer or super cuts
they do haircuts
that's a small company peter lynch is
back with a new book called beating the
street it is always interesting to have
him here
one up on wall street was one of the
better best sellers
ever to about wall street and it is very
simple which most things are very simple
and when you understand them you can
understand what makes the world work i
appreciate you being here
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