Fidelity's Magellan Fund Manager Peter Lynch Was a Stock-Picking Rock Star in the 1980s, Averaging an Annual Return of 29%. Could His Top Rule Then Work for You Now?
He understood what made stocks tick then. What makes them tick now, however, is something quite different.
Overview
You're probably aware that Warren Buffett led Berkshire Hathaway to a market-beating performance for the better part of the past few decades using simple -- not complicated -- investing rules.
If you were in the market in the 1980s, though, then you also know Buffett wasn't the only stock-picker with superior stellar results around that time. Fidelity's Magellan Fund (NASDAQMUTFUND: FMAGX) manager Peter Lynch was reliably hot during that era too, with an average annual gain of 29% that inflated the fund's assets from $18 million to $14 billion while he was at the helm between 1977 and 1990.
Details
The secret to his success? It was also his favorite advice to investors: "Invest in what you know," mirroring Buffett's famous advice to "never invest in a business you cannot understand." The question is, given how different the market environment is now compared to then, does Lynch's top tip still work?
Source
Originally published at www.fool.com.