Re: It works as Peter Lynch said
mInvestor
8/5/2012 5:28:54 PM
Noreen,
It's an interesting experiment. We can learn lot more of some companies from our daily activites. However, I'd think When Peter Lynch said invest in what you know, he means more than just what I know generally from something like doing grocery shoping. We still need to find out why Costco is better than Sam's clubs. or why HESS is getting more profit vs Chevron.
So I think we need to dig a little bit deeper to know a company.
don't think Hess's strong safety record is making it LESS attractive versus other oil companies, do you?
Maybe. But if we're buying what we know, as in this experiment, I'm also open to buying things in which I believe, so companies with good social responsibility or environmental or safety records are appealing. And when I fill up on a Saturday afternoon, I'm more willing to go to Hess than BP.
Re: It works as Peter Lynch said
Value Hiker
7/24/2012 10:44:00 PM
@street smart, you are right about the different approaches of Buffett and Lynch. But it is hard to say which approach is better for average investors.
Buffett's approach has more solid foundation, he succeeded in combining Graham's value with Fisher's growth. Buffett's concentrated portfolio means you only need to focus on dozens of stocks, which can be held for long time. For average investors, it means that they can spend less on research, and routine check.
Peter Lynch's nicknames are "mole" and "chameleon". Lynch spends tons of time to research hundreds of stock. And he can make quick adjustment of portfolio at the blick of eyes. For average investors, we don't have that much time and dozens of supporting stuff, it may not be practical to follow Peter Lynch's method exactly.
I like Lynch, because he was the first Wall Street Guru, telling average investors "You can do it". I like Buffett, because he despised these wall street guys, and recommended conservative approach.
Re: It works as Peter Lynch said
Street Smart
7/24/2012 10:46:32 AM
I think Peter Lynch is a better yardstick for your investing talents than Warren Buffett, @Noreen. The reason I say that is that Buffett buys big and then uses his clout to influence the direction of the company in such areas as marketing, cost control, acquisitions/divestitures, etc. In other words, he finds value and then maximizes it.
As individual investors (or even as a legendary fund manager) we don't get to be the hands-on managers. Based on what I would do if I WERE a manager, I'm impressed with Kohl's even if it's down. After you wrote the original portfolio post I took a second look and came away impressed.
And cynical me...you don't think Hess's strong safety record is making it LESS attractive versus other oil companies, do you?
Re: It works as Peter Lynch said
tokyogai
7/24/2012 8:50:04 AM
Maybe it would also be good to think about what you are buying less of and which of the things in your basket are really new. That could help point to trends before the market sees them. It is always good to be ahead of the curve.
Re: It works as Peter Lynch said
driven
7/24/2012 8:10:46 AM
IDK Value Hiker...while there is one big loser, it looks like three of the stocks did very well -- outpacing the Lynch estimate of one big winner.
Sure, value hiker. P&G is a great stock. But I didn't want to delve too deep into the shopping basket for this experiment - rather, I was just looking more at where I went, translating a map to stock symbols.
It works as Peter Lynch said
Value Hiker
7/23/2012 8:28:07 PM
Noreen, here is my two cents:
1。 Peter Lynch said if you buy 5 well selected stocks, most likely you got one big winner, one big loser, and others are just so-so performers. Your portfolio reflects Lynch's theory after 6 months
2. Peter Lynch's average holding period is 2-3 years, it is too early to say who is the real winner or loser in your portfolio
3. I like comsumer staples companies like PG, JNJ, and KO. Did you ever buy these companies' product on weekly base?
It makes sense
tokyogai
7/23/2012 3:39:20 PM
This style of investment makes sense- much more than many fo the analysts. The only caution I would have is to make sure that you are behaving the way others do. If there is some off beat thing you like, that may not be a trend that other consumers will follow. Things like Costco make real sense, it seems my nearest store is more crowded every time I go in it. There may also be opportunities in P&G and other consumer staples. These actually do tend to sell more as the economy improves.
This is interesting Noreen. I've often wondered much the same thing. I mean, we've talked about this before here, but what if I had bought Apple when I got my first iPod? (I'd probably be selling about now, because I'm not convinced the company will sustain its value.) But the fact is: Why not invest in products or services that we like and enjoy?
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