Peter Lynch

The Ground Scout

You find ideas in the mall, not the terminal. You own a lot of names because you are willing to be wrong often as long as the winners are big, and you do the homework in person before the analysts get there.

Position on the six dimensions

Where this method has an edge

• You spot trends before the Street does
• Being wrong often does not sink you
• You actually enjoy the research

Where it can hurt you

• Owning 50 names is hard to keep track of
• Your turnover can quietly eat returns
• Anecdote can outrun the fundamentals

One rule from this method

For every position, write one sentence on why you own it and what would make you sell. If you cannot, it is a story, not a holding.

The other nine