Where have all the Star Stock Pickers Gone?

By John Reese (@guruinvestor) —  The days of the star stock picker are largely gone, but aspects of their investment genius live on in other ways. In the mid to late 90s, the Fidelity Magellan fund was the largest mutual fund in existence. Run for years by the legendary Peter Lynch—during which time the fund’s return doubled that of the market– the fund went from $14 million in assets to $40 billion by the time he retired. Magellan consisted of hundreds of hand-picked stocks that met the criteria of Lynch and the managers, including Jeff Vinik, who managed the fund […]

Keys to Investing Success and Solid Picks

In a recent Forbes article, Validea CEO John Reese shared a list of core investing concepts outlined in an essay for the CFA institute by Vanguard founder Jack Bogle, and offered parallels with tenets of market gurus such as Warren Buffett, Peter Lynch, and Joel Greenblatt: Invest you must. Failure to earn an adequate return is riskier than short term market volatility. According to Joel Greenblatt: “The strategy of putting all your eggs in one basket and watching that basket is less risky than you might think.” Time is your friend. Benjamin Graham referred to compounding as the “eighth wonder […]

Peter Lynch Style Investing: Simpler is Better

 In an article for this week’s Nasdaq, Validea CEO John Reese highlights the investment philosophy of guru Peter Lynch that centers on the importance of investing in what you know. “Hardly a pithy inside tip” writes Reese, “but very characteristic of the Lynch approach.” Lynch generated one of the most impressive track records of all time during his tenure as manager of Fidelity’s Magellan Fund from 1977 to 1990. Reese outlines the concepts that form the foundation of his common-sense investment strategy, including how Lynch categorizes companies. He also describes one of the most important metrics in Lynch’s methodology, the […]

Peter Lynch’s Long-Term Game

The legendary manager of Fidelity’s Magellan fund (in the 1980s) was big on doing plenty of research before investing, writes Validea CEO John Reese in a recent issue of The Globe and Mail. Reese outlines Lynch’s investment philosophy and summarizes three maxims that the veteran fund manager outlined in his 1993 book Beating the Street; (1) do your homework, (2) invest for the long term, and (3) only buy what you understand. Surprisingly, the tenets were presented to Lynch in 1991 by a group of seventh graders who were learning about the stock market. Reese offers three high-scoring picks identified […]

Peter Lynch’s Strategy and PEG Ratio Picks

The legendary manager of Fidelity’s Magellan fund (1977 to 1990) and author of One Up on Wall Street subscribed to the investment philosophy of buying into companies you could understand and then analyzing their fundamentals. One of Lynch’s go-to metrics was the PEG ratio (an indicator of value), which measured the relationship between a stock’s price-earnings ratio and its earnings-per-share growth. In a recent article for TheStreet, Validea CEO John Reese explained his Lynch-based stock screening model and identified some picks that make the grade: Waddell & Reed Financial (WDR) is a mutual fund and asset-management company that earns high […]