Peter. Lynch's most legendary fund manager

 Secret
high turnover of Peter. Lynch, known as Magellan fund manager fund of the first four years, the first year of the turnover rate was 343%, followed by 3 years is 300 %------ Magellan Fund, Lynch hands as in a kaleidoscope of ever-changing rotation, so dazzled onlookers.
Magellan Fund was founded in 1963, formerly known as Fidelity International Fund (FidelityInternationalFund), 1965   3 changed its name to Magellan Fund. At the time, Peter. Lynch was a student at Boston University the weekend when golf Children work-study program, he joined Fidelity .1972 as securities analysts, concerned about the textile industry, metal industry, chemical industry and other company's stock, is run into the U.S. stock market 1972-1974 crash. The crash is the United States since 1929 the largest since the stock market crash, the Magellan Fund suffered, the amount of its funds in 1966 was 20 million, to reduce to 600 million in 1976. Therefore, the company had in 1976, another fund with its Essex Fund (Essex, Fund the amount of 12 million) combined. Of course, the merger also gave Peter. Lynch a chance. He was promoted in 1974 to study the manager of Fidelity Investment Committee was appointed .1977 on Magellan Fund more manager.
his inauguration, Peter. Lynch was busy not only to his own convertible ------ stock options replace the former stock, but would pay the investors realized the stock redemption requirements. This is the origin of his high turnover rate. In a bear market mutual funds were abandoned by people, forced from the Magellan Fund from 1977 to 1981 for 4 years closed to new customers, and redemption of units to be serious about one-third of the shrinking one. Peter. Lynch stepped in, the high turnover rate is really a last resort. Of course, this also depends on Peter. Lynch's better stock to replace the stock I have chosen the electronics industry and the energy industry's stock, increasing the financial institutions, broadcasters, entertainment, insurance, banking and financial industry, consumer industry, hotel industry and the stock leasing industry. In 1979, the Fund Report, Peter. Lynch is his particular concern that the 5 major types of company: small and medium sized growth companies; outlook is improving the company; in a cyclical downturn in the company; high-yield and dividend growing companies; those who are the market value of the assets to be overlooked or underestimated company. Fortunately Magellan Fund is capital appreciation fund, to purchase any assets, so Peter. Lynch has room for full play.
also left him with the high turnover rate many regrets, many stocks in his After a strong selling trend in favor of the new shares is not satisfactory, and even he often joked, Buffett's call, the request to allow his annual report to shareholders cited this sentence. see, Buffett is also deeply felt this. like the movies, stock trading is a kind of br> This 4-year closure period for Peter. Lynch tantamount to a strict training, he was forced to know all walks of life, to understand each company or industry led to rise and fall of the various factors. In the person of all mutual funds in Boston, he visit the headquarters of dozens of companies each year, at the understanding in the region dozens of investment companies, Fidelity invited 200 companies to a luncheon held various discussions to form at least a month, and every major industry group representatives a conversation practice. And He says that he gains the most important is to do research to understand the value of their own.
Hard work pays off, Peter. Lynch made a remarkable performance, even though a third of the Fund are redeemed One, the fund has jumped to 50 million the amount of .1981, the Magellan Fund and Se Lamu Fund (SalemFund, the original Dow Theory Fund ------ DowTheoryFund) start public offering to the public.
II Spotlight Magellan Fund under
1981 年 open to the public, when the fund size of over 100 million yuan, investment of more than 200 stocks. After 4 years of closure period, Peter. Lynch redeemed not only survive the height, but also made superior results. not a lot of redemptions as investors, fund turnover dropped from 300% to 110%.
for the Magellan Fund, it all has just begun, we can look at the record: the end of 1982 , fund size of 4.5 billion; to April 1983, the fund size to break the 10 million; 1984 Fund size add 10 billion, in 1985 1.7 billion is added; to May 1987, the fund size is jumped to 100 million. so amazing pace of development, Tracing the source, but it is a special TV program started.
Louis. Lukai Se (Louis Rukeyser), the He presided over by Financial Review program, The first lesson to be informed daily must-read ;, was invited to appear on the show.
Although Lu Kaise until one minute before launch of this program did not show up, but then Lynch is very friendly and quietly told him not to stress: . Lukai Se with the boring boring financial program featuring the introduction of humor. He came up let Lynch reveal a - visit the 200 year listed, read the annual report 700. Lynch called the dialectic: into two parts: one cycle of growth and type of stock, the other is conservative stocks. , I'll sell growth stocks and cycle-type stocks have been profitable, and then funds into conservative stocks. company. year in July, Lin Qite visits to the company headquarters, interviews with company executives. Lynch says he is his investment position.
Q and high-tech companies, Lynch admitted that they do not understand technology or even not have thought he was a October inflow of 40 million, 11 months is 71 million, Dec. 55 million .1983 is 76 million in February, March and achieved 100 million. At the same time, the rapid appreciation of the stock also, Chrysler stock 8 months increased by 2 times. to April 1983, the fund size to break the 1 billion.
In fact, the mass media in the United States to grasp the initiative in the society, such a rapid growth of the Magellan fund, leaving the spread of mass media effects is difficult to imagine, Lynch in the company's magazine Stock History: 1986, 100 kinds of recommended stocks, 1987 was 226 species, 122 species in 1988, 1989 91, 1990 73. early years, Lynch asked, In 1992, Peter. Lynch quit. In the same year in September, Lynch in his debut after the 10th anniversary of the re-appearance Lu Kaise's career of a successful conclusion.
of three whales and Shrimps
with Peter. Lynch unveiled the shocked, the media naturally very concerned. opinion asserted against the Fund too large to maintain good performance. in the Fidelity fund assets exceed 10 billion, 20 billion, 40 billion, 80 billion, many people have repeatedly predicted that Fidelity will decline . Lynch did not believe this evil.
the plight of the large fund managers, Lynch is too well aware, of course, his response to it, is more concerned about the larger tens of thousands of small companies, the so-called small fund to buy large companies, large funds to buy small companies. Lynch shares the hands of an increasingly large group thus: in April 1983 exceeded 1 billion fund assets, the expansion of the number of shares held by the Fund to the 450, then turn to the autumn 1-fold, to 900, and later to 1400.
In fact, Lynch is also buying up a lot of selling at the same time. with his own words, that 900 has 700 stocks in total assets do not to 10% of the total assets of the Fund, and there are still many stocks are listed in the sell. there is a Lynch vacation home, a phone booth in the national park, traders also spent two hours to report only the first letter of L stock. with a vivid metaphor, like Lynch's Fidelity head of marine organisms the largest baleen whale, swallowed by a large number of Antarctic krill to survive.
Even so, he was found not to be able to buy enough shares outstanding small companies. to purchase shares of large companies Jiancang take months to sell off old stock, you need more patience. However, Lynch's performance is still brilliant, he claims the secret of its success is the
the most straightforward example is Fidelity's . This indeed greatly improve the transaction efficiency of this important aspect, so Lynch can focus more on research stocks. the secret is they made the division of labor, just buy Leiden, DeLuca is responsible for managing sales. Deluca lady who married many years later, the day before leaving the company to allow her to do a bid to experience the buying mood. she saw vendors offer 24 yuan to 24.5 yuan immediately after the price actually hang out.
most interesting, it is a bunch of assistants have been the young man as Lynch. The so-called assistant, is a listed company, analyst call, so Lynch more effective use of his valuable time. These young man's words and deeds but because Lynch has established Chengle Fidelity's new fund managers: Ridge. Fanting Chengle Fidelity Growth Fund, Fidelity Puritan Fund, a fund manager; Danny. Frank Equity Fund special event management; George. Nubo business overseas funds; Bob. Stein Sharansky to receive Growth Fund; Will. Danni Fu responsible for the reverse Fund; Jeff. Wei Nika responsible for the Magellan Fund. so Lynch was particularly pleased that, for every appointment A new manager, the more a source of information to find good stocks. Meanwhile, the new fund also allows the new budding analyst. Fidelity fund managers and analysts to form a strong team composed of.
these managers and analysts conference room every day gathering information exchange to find good stocks, which soon became the official schedule of the company institutionalized. In Lynch chaired the conference, only 3 minutes for each person introduce his good stock. Then further to Lynch timekeeping was set at 1 minute and a half. Lynch believes that only a few words can make it clear the stock is good stock.
according to Lynch's own summary of Fidelity's brilliant performance from the company's basic system, that is, fund managers personally responsible for stock selection. analyst responsibilities is stock selection, but he was the fund manager to work independently without influence. This is a 1 +1 choose good stocks.
, of course, all this can not be separated Lynch In 1991 when he decided to quit, the Fidelity fund's assets reached 140 million, of which 1.4 billion in cash. to know, though it was the United States assets of the fund industry as the market scale of the transformation pattern of rapid growth, but it can beat the broader market on the profitability of the fund but is rare. Since Lynch, the Fidelity funds can be described as outstanding.
of four science, art plus leg work
can not too much to say, Peter. Lynch superior stock picking ability is the secret of the Fidelity Fund outstanding. So how is stock selection Lynch do?
comes to stock picking, it was a a matter of opinion, different opinions of the topic. Some people say that stock selection is the or be denounced as will be like the ancient Greek philosopher Thales (Thales), interested in astrology and do not see the sky at the foot of the pit, as well as will walking down Gendou. As to the stock picking as a pure art are equally dangerous. the art in this context, refers to the intuitive, emotional and artists are good at the right-brain activities. we can only lament that, as a first essence of Lynch's stock selection philosophy is based on a basic belief: choose the right stock. industry is developing rapidly, but can not beat the broader market fund to 10%. So, then even more resounding Lynch. In the stock market is full of turbulence and traps, Lynch emphasized a certainty and confidence in the trend. He insisted that the conviction and select stocks, the latter's success depends on the former. as a successful fund managers, increasing assets under management Lynch large, facing strong pressure of public opinion on its ability to maintain excellent performance challenge is to stimulate the desire to challenge Lynch, Lynch responded strategy is offensive ------br> on Lynch's stock selection, there is the image of his own summary: career, the most important to cultivate a habit, is the concern has been to sell the stock. took over Magellan Fund, because of the high turnover rate, but also because too few good stocks, he was forced to concern over the stock sale. with In his words, the investment, --- ; 6:45 to the office, see orders; and then to study: public information obtained from the clues, from analysts, representatives of listed companies to invest in search for further clues affairs, directly to the company to understand the situation and so on.
direct contact with the listed companies, including call or home interview. Lynch, the results recorded in the live page, and then bound into a book. according to Lynch's description, which is like a , including extracts from the quarterly and annual reports in the important details and the latest reason to buy or sell. (sometimes a day can pile 3 feet high), annual reports, the exchange of notes with other companies.'s rarely go to lunch, lunch is often a gap in a telephone swallowed a sandwich.
80 mid, the total assets of Magellan 10% invested in foreign stocks, which also can not do without the hard work of Lynch. to name a September 1985 the first overseas research, for example, Lynch 3 weeks of 23 listed companies research: a Friday in Boston to visit 3 The company, boarding the afternoon flight to Sweden; Monday to visit the company began in Stockholm, two days visiting the seven companies; then drove to Oslo, Norway, digital and Norsk Hydro to visit; and then the train to Bergen, from where Frankfurt, study Deutsche Bank, Dresdner Bank, etc.; arrived at Dusseldorf, visit the Bayer and other two companies; along the Rhine to Cologne, to visit a number of companies; to a highway in Germany (each hours 120 miles) to the Basel, Switzerland, the Swiss inspection company; and then through the Alps to visit the company in Milan, Italy, to Rome, visit the enterprise; and then fly back to Boston, where he also visited the four companies. see see his very full schedule, it is not inferior to Henry Kissinger, that the famous Some have plausibly raised the so-called cross-border investment in the ; cultural spread , thanks to Peter. Lynch's
Speaking of growth stocks, people will naturally think of high-tech company's stock, the 20th century, 90 U.S. technology stocks have been brilliant, and some American companies even set a record of 500 times earnings, we can see its stock price high. Lin Church has shied away from high-tech stocks, because according to his experience, Heat the stock in network investment: First, follow the gold rush era of the who sold picks, shovels, tents and jeans who has made a fortune, and now network in money-burning, but for network equipment, circuit, service providers have actually made money. Lynch recommended buying The other two companies are the transformation of the industrial age, the growth stocks everywhere, outstanding particularly in service industries. In Lynch seems, restaurant chains and retail companies through national expansion, in 10-15 years for 20% annual growth rate, which is 3 years to turn 1 times. They not only as a high-tech companies and high-yield, fast growth, but with less risk. for which he also found the assets need to turn 1 times the number of years. such as return on investment of 25% 3-year double, 15% was 5 years. Lynch believes that the key to take advantage of these growth stocks is to determine the company's expansion Shipi go head , the ability to seize the The savings base, the management is efficient, prudent commercial bank loans. small financial institutions, small plates, he could only buy in batches, the end of 1983 the number as high as 100. Lynch and his team even played a nickname these small companies: for example, the Federal National Mortgage Association, known as ; of the market, the market in the U.S. to an annual turnover of 300 billion U.S. dollars in size. This Fani Mei, either in the Magellan fund manager Lynch last 3 years, accounting for the fund's largest position, market capitalization of 500 million, the entire 80 Fidelity and its customers to earn in the stock on the full profit of 10 billion dollars. In 1987, after the stock market experienced a major adjustment, Lynch or financial services to mining stocks, including the hit was hard pressed by the market to the mutual fund.
the same time, Lynch's position also included, such as General Electric, Philip. Morris, Kodak, Merck shares and other growth companies. General Electric, the general characteristics considered to be cyclical with blue chips, in fact, the trend curve of its 80 fully comparable to the steady growth of such shares of Johnson & Johnson.
Kenwood Lynch has chosen this entertainment production company producing TV shows, including the famous Europe-America Puri's talk show, a big moneymaker for the company.
select growth stocks, of course, inseparable from the industry background. Lynch, believes that It is the performance of time Darts way to determine the car to buy shares, or one by one for each car company to analyze? Lynch used the example of U.S. auto giant, pointed out that in 1982-1987, General Motors, up 3 times, Ford Motor rose 17 times, g Chrysler is almost 50 times. Lynch chose the Chrysler, in March 1982 he bought Chrysler, visit the company's headquarters in July, and executives to meet with Lee. Iacocca talked for 2 hours . At that time, Iacocca strongly recommend the company's new model T-115-type mini station wagon. Sure enough, 9 years new models of the three million sales.
Lynch also found that the performance of enterprises usually have 7-10 years cycle. such as Chrysler, 1988, earnings per share is 4.66 yuan, only 1 per 1989 in 1990, fell 30 cents, a loss in 1991 also. Some industries also showed cyclical fluctuations, such as paper, chemicals, iron and steel.
伴君如伴虎, cyclical stocks can bring huge profits, but also make you lose everything. with Lynch's words, 21 card game, if you bet too long, then the final to win the money will lose it all. transfer, this is the first time in 5 years, due to market saturation stage, he no longer optimistic about the auto stocks, instead buy financial stocks.
All this of course can not do without the U.S. stock market fundamentals. Lynch had done in the 90's statistics, the stock market crash at the turn of 20-30 years are included, the U.S. stock market's average return on equity of 11%, more than Treasury bills, bonds, certificates of deposit returns double. The basic fact Lynch supported the bigger picture, I believe the stock's growth by supporting economic growth, I believe that as long as the election of the stock will eventually be rewarded. The bigger picture to make Lynch's brilliant performance.
walk off goods trade: stock selection in their daily lives
Peter. Lynch fund managers in the 13-year career under enormous pressure, from a statistical data can be seen ----- - He has invested a total of over 15,000 kinds of stock! and you can not help but admire that, Lynch talked about these stocks very familiar. He is how to find and track these stocks do?
Jane Lynch has received. Bell Marketing, Inc. (a jewelry supplier) of the executives, when they describe the company's business comes to a discount to their customers ------ Xuduo strong sales. Lynch this instruction, an analyst for the discounts Shop for Special Research. research shows that much of these companies after the IPO cold, can be described as inexpensive, Lynch really made money in these stocks, and some turned over 3 times. This is the ------ classic approach of upstream and downstream from the peer relationship, or find good stocks from here.
but the most distinctive Lynch stock picking method he calls - Walking off goods trade (shopingmall). specifically, away from the Lynch lived in the town of Ma Haide 25 miles of the Burlington Mall walking.
the Burlington Mall looked like in the Lynch an American old-fashioned town center, ponds, parks, trees. pond is lined up across the four stores, two-story commercial building pond distributed more than 160 independent stores. so large and the U.S. goods trade sales are 450, in Lynch, the stock appears to be good to explore the gold mine. Let us look at the shopping sales Lynch all the way to see when the goods trade: Furniture Mart, Jules Rimet, the Gap, Wal-Mart Mary and other retail businesses, its stock from 1986 to 1991 rose by 50 times; $ 36; Lai Weizi furniture rose 100-fold; Lynch's daughters like Lynch, these retailers have adapted to the characteristics of American life post-industrial era to win the tide of market opportunities, looking for clues to the best of these enterprises is that they are beginning to look like a sell goods trade, where you can be close observation their products and customers can feel the pulse of their markets.
find beauty shop (Body Shop) is an example of the process. It was before Christmas, Lynch, Burlington Mall with her daughter to purchase gifts, a the kids went straight to the door of this store. This is a unique shop selling products such as bananas and strawberries into the bath, bee wax eyebrows oil, fruit flavored lip balm, carrot moisturizing cream, face cream orchid oil, wheat friction cream porridge, sea mud shampoo and so on. Although Lynch did not appreciate these products, the customer at his door but was infected by the sight, he found that this shop is close to major shopping malls in sales of 1 / 3. so he thought the company's analysts had recommended stocks over this company, but also think of the company there was a female colleague to give up paying jobs Stephenson own money and opened a beauty shop, and found she is the owner of this store.
Lynch's analysis of reports from brokerage firms and exchanges with the Stephenson learned that the British company launched by a housewife, 1984, issue of shares listed in London, and soon developed into an international franchise of fruit skin care franchise enterprise. The secret of success lies in our products using natural raw materials, selling is healthy and not beautiful, expensive price than the discount stores, cheaper than the stores, so the sales per square foot of sales area in retail stores in Canada is the highest. Stephenson's experience operating such a chain can be profitable year, so she plans to open a new store, specifically, chairman of this company came to visit from the UK, the expansion of company business prudence. Lynch's conclusion is that The company's unified business model, expansion plans, balance, etc. in good condition, annual growth rate of 25% to 30%, is a fine texture, good company.
Lynch, of course, also had his troubles, and that is its stock of 42 times earnings is too high. Lynch know that any growth stocks more than 40 times as long as the price-earnings ratio is very dangerous, but still made a study of Lynch: S & P 500 was 23 times price-earnings ratio is the growth rate of 15% of the Coca-Cola price-earnings ratio of 30 times. Comparing the two, the key issue is beauty shop can maintain their growth rates. Lynch very confident, he thought as the company's global expansion, there will be thousands of beauty store chain, stock prices will further rose 70-fold. Lynch do this in the search on the stock has developed a kind of professional instinct, in his own words as only br> 1990  5 31, 13, served as manager of the Magellan Fund, anniversary, Peter. Lynch quit, a formal request for retirement. after talking about his departure, Lynch explained that he was confused in a Hamlet-like question: : In his 13-year career, the rapid expansion of the size of the Magellan Fund and the funds raised by the scale of public opinion on this too much doubt detrimental to their performance, which are always inspired him to challenge the limits, and constantly create a simultaneous increase in fund performance and size a new record. He also paid for his brilliant high price, sealed in the Magellan fund 4 years ...