<--OT-->Ok sig time to Lynch'em, I think. [See Peter Lynch's advice below]
Highlight from last night's interview from NBR.
Peter Lynch: ". You know, since 1970, there's been 13 10-percent declines. There's been 4 percent, four times the market's decline over 25 percent, since 1970. Despite that, the stock market's been a good place to be. If you don't understand that, you're off to a rough start. I mean, that does not make you a good investor. You have to get this information. You have to become educated.
Good morning Sig:
Did you say gold at $620? Got some too with funny names likes Krugerands,Canadian Maple Leaf,Chinese Panda,Credit Suisse,Mexican Peso,American Eagle, a virtual united nations I telly,didn't want to discriminate you know,all for a price of $320-400 and change and now you can pick them guys up for $287.00.Some investment eh? But that is ok we like'em irrespective of the price,particulary the women folks and they couldn't be bother with little things like price you see.I ain't kiddin', here is what I mean.
gold.org
I suppose you are talking about this for those who missed it.
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Source: NBR 09/03/98
<b?Investment Advice From Peter Lynch
SUSIE GHARIB: So what does legendary investor, Peter Lynch say about this stock market? I talked with him a few hours ago. And here's what he had to say. Peter, you have been in this business for so many years.
You've seen all sorts of markets, ups and downs and that sort of thing. What's your take on this market?
PETER LYNCH, VICE CHAIR, FIDELITY MANAGEMENT & RESEARCH: Well, you only find out, it's like, you know, the football games. You know, before the game, they say it's going to be very close. They don't know who's going to win. And then after, they give you every detail of what play they made wrong, what mistake they made. And they give you 67,000 words of what went wrong. No one ever knows until after the fact whether it's a small correction, a big correction. The important thing to know is, there are corrections in the market. You know, since 1970, there's been 13 10-percent declines. There's been 4 percent, four times the market's decline over 25 percent, since 1970. Despite that, the stock market's been a good place to be. If you don't understand that, you're off to a rough start. I mean, that does not make you a good investor. You have to get this information. You have to become educated.
GHARIB: Peter, I've heard you say before that it gets darkest before pitch black. How close are we to pitch black?
LYNCH: I won't know. I'll never know. I mean, when I ran Magellan for 13 years, nine times the market went down. I had a perfect record. It went down all nine times. But when it came back, I did better. I mean, I just, I would love to get, you know, next year's Wall Street Journal. They just don't, seem to deliver it to me. I'd love to know the future. I don't worry about this stuff. People that are going to do that are just not going to do well. In fact, I just developed this brochure. I worked about six months on this to get this out, this brochure with Fidelity. This helps explain a lot of things about bonds, about stocks, about markets, about volatility, about recessions. And it has a great ten question quiz. You can get this from calling 1-800-FIDELITY.
GHARIB: All right.
LYNCH: Or you can get it on our Web site.
GHARIB: It sounds like it would be very interesting. Let's get some of your investment thoughts right now. Your investment approach has been that if you own a stock and the fundamentals are good, despite the ups and downs in the market, hold on to it. But given all of the attention to the problems in the international markets and politics and the dollar and all of that, would you adjust your investment advice, at all, given all this international stuff?
LYNCH: Zero! Absolutely zero. I mean, in 1990, an incredible combination. All the banks in the United States, commercial banks were in trouble. We had 500,000 troops in Saudi Arabia. About to start a war with Iraq that was really supposed to be very tough. And we had a recession. It was very scary. But 1991 was one of the, the market was up over 32 percent. It was one of the best years ever in the market.
I mean, listening to headlines and on the news, has never produced any money, for anybody. I mean, you've got to say to yourself, I am content with this mix. Or I'm not content with it. You ought to, every day. Not when the market's bad. Not when the headlines are bad. You've got to look at yourself and say, this is what, the mix I'm happy with it. And stay with it.
GHARIB: But let's say that you own a really good blue chip stock. The fundamentals are good, but given this dramatic selling that we've seen recently and the, you know, momentum selling, how do you know if you should sell or not?
LYNCH: But how did you know you had bought that originally? I mean there's a lot of blue chip stocks. What's your edge in that stock? Do you know something? Is that the industry you work in? Do you know something about the company? I mean unless you know something about it, you need an edge, you know. I'd rather buy a fund of 50 or 100 or 200 blue chip stocks and just pick one out. You might pick the wrong blue chip. At one point, U.S. Steel (NYSE:X) was regarded as a blue chip. At one point, Bethlehem Steel (NYSE:BS) was regarded as a blue chip. At one point, Xerox (NYSE:XRX) was regarded as a blue chip and then it fell about 50 percent. And IBM (NYSE:IBM) was a blue chip and fell 50 percent. I mean that's kind of tough to pick one stock, and say I have a blue chip. I mean companies are dynamic. They're not lottery tickets. I mean...
GHARIB: How about the flip side, how about the flip side of all of this? It's so tempting now that many well-known companies have been, their prices have become bargain prices. How do you know if you should buy now, or you should wait because it might go lower. How do you pick your time?
LYNCH: Well, you ought to have a reason originally for buying it Susie. I mean let's say you've been in the, you know, your industry was the restaurant industry. You should have known something about Taco Bell when it came out. You should have known something about Kentucky Fried Chicken and Chili's. You would have seen these companies. You would have seen Sbarro. You have an edge. That's your edge. You keep following. If the company starts to deteriorate, you sell the stock. You deal with the fundamentals of the company, not with this ups and downs of the market. Companies are dynamic. Underneath every stock is a company. These are not lottery tickets.
GHARIB: Peter you have been such an ambassador about stock investing, but what about bonds? Is this the right time to buy bonds right now, you think?
LYNCH: Well, I don't know when the right time to buy bonds. What's interesting to me, what I found out from doing this research is, since 1926, 20 times the market's gone down, negative years. Eighteen of those 20 times bonds had up years. There's been several decades when bonds have done better than stocks. The reason to look at stocks is a part of a, sort of an anchor to windward, giving a mix that you're happy with. In this recent decline, bonds have gone up. On the month of October '87, when the market fell 22 percent, intermediate bonds were up 3. That's quite, that really helped. So there really is a reason for going bonds.
GHARIB: All right, just to wrap it up here. Wanted to get some bottom line advice from you. What is your best advice? What's the biggest mistake that investors can make in this current market?
LYNCH: The biggest mistake is not being informed. If you're not educated, you're going to do poorly. You're going to do exactly the wrong thing at the wrong time. That's the key. If you don't understand that you're going to get shaken out,
GHARIB: All right, thank you.
LYNCH: You should know what you're doing.
GHARIB: Thank you so much Peter. Really appreciate your taking ti
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