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1.
What was Peter Lynch's favorite investment metric?
P/E ratio. Although he valued several, P/E ratio was his favorite.
2.
Companies whose sales and profits rise and fall in a regular fashion are called _______.
Cyclicals. The cyclicals tend to be predictable.
3.
Peter Lynch's investment style is best described as what?
Opportunistic. Lynch took ideas from many different investment philosophies. He went wherever he thought the best opportunities were.
4.
What three fundamental criteria did Peter Lynch use to evaluate a stock?
Profits, business model, and current stock price. Lynch looked for profitable companies with solid business models selling at good prices. He was willing to pay more for those companies than other managers might have paid, and he tolerated debt as long as the profits were there and the business model was right.
5.
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.
