Test your knowledge

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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?

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Turnaround

Cyclical

Fast grower

Stalwart

Turnaround. Of course, it may not turn around at all, but if it does, its momentum will likely be tied to the overall market.

What was Peter Lynch's favorite investment metric?

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Book value

P/E ratio

Long-term debt

Percent of sales

P/E ratio. Although he valued several, P/E ratio was his favorite.

Peter Lynch believed investors should invest for the short term so that they do not lose money.

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True

False

False. He believed in long-term investing and ignoring short-term movements in the market.

Peter Lynch's investment style is best described as what?

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Value

Growth

Opportunistic

Opportunistic. Lynch took ideas from many different investment philosophies. He went wherever he thought the best opportunities were.

According to Peter Lynch, what are the big winners in the stock market?

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Turnarounds

Asset plays

Fast growers

Stalwarts

Fast growers. These companies have the biggest potential for growth, along with a lot of risk.

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