Peter Lynch believes individual investors have an advantage over Wall Street and large money managers. It is due to their flexibility and lack of bureaucratic rules.
Lynch’s bottom-up approach focuses on companies that investors are familiar with and conducts thorough fundamental analysis. He emphasizes investing in companies with a clear growth story and understanding their business and competitive environment.
Lynch categorizes companies into different types, slow growers, stalwarts, fast growers, cyclical, turnarounds and asset opportunities. Each type of company has its own risks and potential returns. He encourages investors to rely on their own experiences and knowledge when selecting stocks.
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