Here’s a great interview with value investing legend Peter Lynch in which he discusses how he made his first stock pick a 10-Bagger. This illustrates the point that all investors, even the great ones, need a little bit of luck, in terms of timing.
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Here’s an excerpt from that interview:
Q What was your first stock?
A Well, when I got a caddie scholarship to college. It was actually a partial scholarship, a Frances Wimen Scholarship, a financial aid scholarship, but it was thousand dollars to go to Boston College and they gave me a $300 scholarship and I got to earn over $700 a year caddying.
So I was able to build up a little bit of money and I worked also during the winters. So while I was in college I did a little study on the freight industry, the air freight industry. And I looked at this company called Flying Tiger. And I actually put a thousand dollars in it and I remember I thought this air cargo was going to be a thing of the future.
And I bought it and it got really lucky because it went up for another reason. The Vietnam War started and they basically hauled a lot of troops to Vietnam in airplanes and the stock went up, I think, nine- or ten-fold and I had my first ten bagger. I started selling it, I think, at 20 and 30 and 40, sold all the way up to 80 and helped pay for graduate school. So I almost had a Flying Tiger graduate school fellowship.
You can read the entire interview here – Peter Lynch – PBS Interview – Betting On The Market.
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Article by The Acquirer’s Multiple
