When markets are volatile I like to reference videos and writings of legendary investors I respect. As you probably already know, Peter Lynch had the biggest influence on my full time investing career. On December 20, 2019, Lynch came out of hibernation and was featured as the cover story in Barron’s. Shortly thereafter, a Fox business News correspondent traveled to Boston to interview Lynch. (I am sooo jealous)!  

You can see the video on our Video Shelf page. We’ll make the transcript available soon.

As usual, Lynch leaves us with some great quotes, such as:

“Well it bothers me that people are very dangerous when they invest.  This word play the market.  That’s a dangerous term.  If you do some work , do some research, know what you own, look at  the balance sheet ,  if you can eight and eight and get fairly close to 16 you find this company has lots of debt, no cash – they’re in trouble.  So, a little bit of research.  People are careful when they buy a refrigerator, careful when they take a vacation and they’ll put five, ten thousand dollars some stock they hear on the bus or at a party, that’s dangerous.”

One topic that came up was “what did Peter Lynch really mean when he said buy what you know”:

“Imagine if you were in a mall the last 50 years, you would have seen Gap when it was hot, you were seeing Limited when it was hot. You would have seen when it was not hot.  You would have seen when certain people weren’t excited about Gap anymore or then you do some research say well gee, there’s a lot of Limited stores, but they are only 20 you know and they can go to 400.  So, you see a company, I did really well with Dunkin Donuts, a local company. I did well with Stop and Shop.  But people could see that there’s a reason people are showing up or gets to the sunglass hut and no one’s there anymore.  So, I mean that’s research, that’s fundamentals – you don’t leave the mall and buy that thing.  You have to do some more work.”

So, I wanted to address my own thoughts on that subject in a video as a follow up to an article we published on this subject in 2017.

Please check that out here.

Hope you enjoy the video. Have a great investing week!

~ Maj

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GeoInvesting is an investment research boutique in Skippack, Pennsylvania. The GeoTeam's focus is on providing high quality stock market research tools and in-depth due diligence on U.S. small and micro-cap equities and on Chinese companies trading in China and the U.S. We research long and short ideas, and are the leading research boutique charged with helping investors navigate the treacherous China equity universe with a paramount goal to protect portfolios from fraud. Numerous notable media outlets have credited GEO We have been credited with exposing numerous fraudulent companies in China. We have built a reputation in the US small and micro-cap space as champions of transparency. On the long side, we have also developed a knack for picking stocks that have the propensity to get acquired at attractive premiums to their current prices. Our team is currently comprised of 13 analysts and traders, and 7 on-the-ground researchers in Mainland China.

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