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1.
Peter Lynch believed investors should invest for the short term so that they do not lose money.
False. He believed in long-term investing and ignoring short-term movements in the market.
2.
If you are interested in buying into a company because of one specific product, what would Peter Lynch's advice to you be?
Make sure that the product is a meaningful percent of sales. Otherwise, there isn't much sense in keeping an interest in the company.
3.
According to Peter Lynch's classification system for companies, a company that has been beaten down might soon rise again. What kind of company would this be?
Turnaround. Of course, it may not turn around at all, but if it does, its momentum will likely be tied to the overall market.
4.
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.
5.
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.
