Never invest in any idea you can't illustrate with a crayon
Peter LynchRead
You shouldn't just pick a stock - you should do your homework.
Interpretation
Thorough research is essential before making investment decisions.
This quote emphasizes the importance of conducting proper analysis and due diligence when selecting stocks for investment. It suggests that investing should not be a casual decision, but rather a well-informed action based on comprehensive knowledge of the companies and the market.
In practice
This quote is perfect for a seminar on investing where the importance of research will be discussed.
Never invest in any idea you can't illustrate with a crayon
The basic story remains simple and never-ending. Stocks aren't lottery tickets. There's a company attached to every share.
The junior high schools and high schools of America have forgotten to teach one of the most important courses of all. Investing.
All the math you need in the stock market you get in the fourth grade.
You can find good reasons to scuttle your equities in every morning paper and on every broadcast of the nightly news.
Just because you buy a stock and it goes up does not mean you are right. Just because you buy a stock and it goes down does not mean you are wrong.
Everybody thinks that they're going to time the market, they're going to sharpshoot the market, and buy right at the bottom. The truth of the matter is that nobody is good at it.
Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.
Investors repeatedly jump ship on a good strategy just because it hasn't worked so well lately, and, almost invariably, abandon it at precisely the wrong time.
Whenever you hear a discussion about the short-term swings in any given stock's price, your immediate thought should be whether it matters to why you are investing.
Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.
Owning equities is an essential part of anyone's portfolio. You just can't ignore it over time. It's going to add the real pop to anyone's overall performance.
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