5 Peter Lynch-Style Stocks


John Reese Image John Reese Founder and CEO, Validea.com And Validea Capital Management

Peter Lynch is certainly one of the legends in the investment business, and if you look for stocks like him, you come up with some very interesting names observes John Reese in Validea.

Choosing the greatest fund manager of all-time is a tough task. John Templeton, Benjamin Graham, John Neff—a number of investors have put up the types of long-term track records that make it difficult to pick just one who was "The Greatest."

If you were to rank Peter Lynch at the top of the list, however, you'd probably find few would disagree with you. During his 13-year tenure as the head of Fidelity Investments' Magellan Fund, Lynch produced a 29.2% average annual return—nearly twice the 15.8% return that the S&P 500 posted during the same period. According to Barron's, over the last five years of Lynch's tenure, Magellan beat 99.5% of all other funds. If those numbers aren't impressive enough, try this one: If you'd invested $10,000 in Magellan the day Lynch took the helm, you would have had $280,000 on the day he retired 13 years later.

Just like investors who entrusted him with their money, I, too, owe a special debt of gratitude to Lynch. When I was trying to find my way in the stock market many years ago, Lynch's book One Up On Wall Street was a big part of what put me on the right track. Lynch didn't use complicated schemes or highbrow financial language in giving investment advice; he focused on the basics, and his common sense approach and layman-friendly writing style resonated not only with me but with amateur and professional investors all over, as evidenced by its best-seller status.