During every question-and-answer period after I give a speech, somebody stands up and asks me if we’re in a good market or a bad market. For every person who wonders if Goodyear Tire is a solid company, or well-priced at current levels, four other people want to know if the bull is alive and kicking, or if the bear has shown its grizzly face. I always tell them the only thing I know about predicting markets is that every time I get promoted, the market goes down. As soon as those words are launched from my lips, somebody else stands up and asks me when I’m due for another promotion.
Is This a Good Market? Please Don’t Ask!
Peter Lynch became an investing legend managing Fidelity’s Magellan Fund during the 1980s, chalking up average gains of +28.5% per year for the entire decade. His 1989 book, One Up on Wall Street, became an instant classic.
In this excerpt, he explains (with a good dose of wit) why he recommends focusing on the quality of specific stocks (or mutual funds) rather than looking at “the market” as a whole. The illustrations he cites may be dated, but Lynch’s insights offer wisdom for newer investors and valuable reminders for the more experienced.