Actionable insights — Who is Peter Lynch?

1. Use everyday observation as the idea generator, and the screen as the filter

1. Treat your own consumption and your family's as a data source: what your children and their friends want, which brand your spouse will not substitute, which shop always has a queue.
2. Convert the observation into a testable claim about the business — rising traffic, repeat purchase, accelerating store openings — before touching the financials.
3. Then run the ordinary quality and valuation work. Noticing gets the name onto the list; it does not get it into the portfolio.
4. The edge being claimed is timing, not insight: "It allows you to spot trends way earlier than Wall Street can."

• A popular product inside a bad business — visible demand tells you nothing about margins, capital intensity or competition, which is why the observation is a starting point.

2. Price a growth business against its growth rate, not against the market

1. Take the forward P/E and divide by the expected earnings growth rate — the PEG ratio Lynch popularised.
2. Read it as a normaliser: it lets a 30x business growing at 30% be compared with a 12x business growing at 8%.
3. Interrogate the denominator hardest. The ratio is only as good as the growth estimate, and growth estimates are the least reliable number on the page.
4. Use it to reject as much as to buy — a low multiple on collapsing growth scores badly, which is the point.

• PEG on a cyclical: peak earnings with peak growth produces a flattering ratio at exactly the wrong moment.

3. Match the strategy to the situation — and know which strategy you are running

1. Classify the candidate before valuing it: fast grower, turnaround, cyclical, stalwart. Each has a different question, a different metric and a different exit.
2. For a turnaround, the question is management and product, not moat — Lynch bought Ford while it was "struggling."
3. Be explicit about which strategy your own process actually supports, and do not borrow a case study from a strategy you do not run.
4. Note the trade-off honestly: a chameleon needs to be right about which regime he is in; a single-strategy investor needs the regime to eventually favour him.

• Style drift dressed up as flexibility — the difference between a chameleon and a wanderer is a written rule for when the regime has changed.

4. Read a great track record for the position that is missing

1. For each celebrated winner, ask what happened after the investor sold — the epilogue is where survivorship bias hides.
2. Separate skill from timing explicitly. If the exit was fortunate rather than reasoned, say so.
3. Distrust the "perfect stock" label in particular: a business that is structurally essential can still be expropriated, nationalised or recapitalised out of existence.
4. Keep the counter-example in the file alongside the winner, so the case study teaches both halves.

• Compounded returns quoted from a period whose conditions cannot recur — 29.3% a year was earned on a fund growing from $18m to $14bn, and size itself changes what is investable.

5. State your actual holding period rather than your aspirational one

1. Measure how long you have really held your winners, and publish that number next to the philosophy.
2. Check the case studies against it — if the stated discipline is "years" and the examples run two to ten years, the range is the honest answer.
3. Let the holding period follow the thesis: a turnaround completes, a growth runway does not, and the two justify different durations.

• Borrowing a hero's returns while running a different holding period — Lynch's 29.3% came partly from turning the book over, not from sitting still.