Peter Lynch is often regarded as the most successful fund manager of all time. He worked as the fund manager of Magellan fund from 1977 to 1990 and grew the fund from just $18 million to $14 billion.

He could’ve stayed with the reigns if he wanted to but he preferred retirement, something most investors can’t even imagine. Not a bad decision for an already ultra-rich person! He’s probably relaxing in his home right now thinking of the next big philanthropy mission he’s going to pursue.

Peter Lynch was so successful during his tenure that he beat Warren Buffett’s average annual gains. Peter Lynch did an average of 29.2% gains annualy versus Warren Buffett’s 20%. And, his investment philosophy is one of the easiest to follow. We’re not sure why he isn’t as popular as other investors!

Here’s some of our favorite tips from Peter:

Thorough Research, Thorough Research, Thorough Research,

Wall Street gets complacent sometimes (or most of the time?). They get all the information from the same sources. Maybe that’s why big companies always have the same recommendations. An individual investor should tap into sources that big companies don’t usually reach out to like customers, personally checking sales inside malls, stalls and/or customer feedback. Look for something that big companies haven’t caught on yet. It may be something going to go big, or something going to go down like what Michael Barry saw in the stock market crash of 2008. The first to know gets the most benefit.

Here’s an excerpt from Peter Lynch’s interview from PBS.

“So I think it was just looking at different companies and I always thought if you looked at ten companies, you’d find one that’s interesting, if you’d look at 20, you’d find two, or if you look at hundred you’ll find ten. The person that turns over the most rocks wins the game. And that’s always been my philosophy.”

Expect Loses

Peter Lynch says that no matter how good you are in, if the market doesn’t pick up, it won’t go up nor will it go down. Peter believes that winning 6 out of 10 trades is good enough (he certainly did better than that). Simply put, if you win more than 50% of the time, you’re winning. It’s as simple as that. Don’t sweat out the losses if you have more wins anyway.

Shit happens. Shrug it off.

Don’t Bother Timing the Market

Peter Lynch’s style was very similar to Warren Buffett’s style of value investing. However, 90% of people don’t know how to time the market. It’s very difficult. Instead, go look for undervalued companies and invest in these no matter what the economy looks like, good or bad.

Focus on the Company

If the company goes well, the stock price will follow.

Check the management team if it has a big enough stake in the businesses. A management team that is heavily invested in a company is more likely to work its ass off for its benefit.

Invest Long Term

Peter Lynch’s biggest winners were held for about a decade. He believes in holding on to a stock long term to truly benefit from its growth. To quote “Well, I think the secret is if you have a lot of stocks, some will do mediocre, some will do okay, and if one of two of ’em go up big time, you produce a fabulous result. And I think that’s the promise to some people. Some stocks go up 20-30 percent and they get rid of it and they hold onto the dogs. And it’s sort of like watering the weeds and cutting out the flowers. You want to let the winners run.”

If You Love the Store, Chances are You’ll Love the Stock

Peter thinks that if you swear by a product or a service, it must mean others are doing the same, and this will reflect in the stock price. Warren Buffett loves Coke and drinks it many times a day. He’s heavily invested in Coca Cola. At a 9.3% stake of his entire portfolio, it’s a highly profitable investment! Love the iPhone? So does the stock market. Apple’s average annual return of 28.45% for the past 10 years!

Ask Your Wife

One of Peter Lynch’s favorite stories to tell is how he discovered “Hanes” company when his wife showed a great pantyhose called “L’Eggs.” The product was so good for his wife that he researched about the parent company Hanes and ended up buying shares. He earned 10x the amount of his investment because of his wife. It became one of his biggest positions in the Magellan Fund!

These are just some of our favorite tips from Peter. He gave away tons and has written his investment philosophy in the 3 books he has written. Peter Lynch donates all of the proceeds from these books.

Check them out:

One Up On Wall Street: How To Use What You Already Know To Make Money In The Market

Beating the Street

Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business