Peter Lynch investment philosophy for selecting a company
Invest in What You Know (The return expectations are derived from the company’s "story")
Bottom-up approach (prospective stocks must be picked one-by-one and then thoroughly investigated)
Examine the company’s plans (how does it intend to increase its earnings, and how are those intentions actually being fulfilled)
Peter Lynch on companies to avoid
Hot stocks in hot industries.
Companies (particularly small firms) with big plans that have not yet been proven.
Profitable companies engaged in diversifying acquisitions. Lynch terms these "diworseifications."
Companies in which one customer accounts for 25% to 50% of their sales
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