Choose wisely. There is only one correct answer to each question.
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1.
How did Peter Lynch feel that we should regard short-term market movements?
We should discard them. Lynch believed in investing for the long haul.
2.
What sorts of companies did Peter Lynch favor?
Those in industries he understood. Lynch invested in those in industries he understood. Lynch firmly believes that you should invest only in what you know. He shunned industries he didn't understand, even if they presented great value or great possibilities. Notice this echoes Warren Buffett's "circle of competence" idea.
3.
According to Peter Lynch, what are the big winners in the stock market?
Fast growers. These companies have the biggest potential for growth, along with a lot of risk.
4.
Which of the following was not a part of Peter Lynch's stock-picking approach?
Focus on the market and the short term. Lynch argues that the stock market is completely irrelevant. Moreover, he thinks that it is impossible to predict what stocks will do in the short term and recommends investing only for the long run.
5.
What was Peter Lynch's favorite investment metric?
P/E ratio. Although he valued several, P/E ratio was his favorite.
