From ‘Introduction to the Millennium Edition’

of ONE UP THE WALL STREET by Peter Lynch

• In the doldrums of the early 1970s, when I first took the helm at Magellan, at that low point, demoralized investors had to   remind themselves that bear market don’t last forever. Today it is worth reminding ourselves that bull market doesn’t last forever and that patience is required in both directions.

• What Mr. Market pays for a stock today or next week doesn’t tell you which company has the best chance to succeed two to three years down. I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow or next week is only a distraction.

• Never invest in any company before you have done the homework on the company’s earnings prospects, financial condition, competitive position, plans for expansion and so forth.

• In my experience, six out of ten winners in a portfolio can produce a satisfying result. All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.

• Speaking on long-term gains, in eleven years’ worth of luncheon and diner speeches, I’ve asked for a show of hands: “How many of you are long-tem investors in stocks?” To date, the vote is unanimous- everybody’s a long-term investor, including day traders in the audience who took a couple of hours off.

• People are advised to think long-term, but the constant comment on every gyration puts people on edge and keeps them focused on the short term. It is a challenge not to act on it.

• It is foolish to bet we have seen the last of the bears, which is why it is important not to buy stocks or stock mutual funds with money you will need to spend in the next twelve months to pay college bills, wedding bills, or whatever. You don’t want to be forced to sell in a losing market to raise cash. When you’re a long-term investor time is on your side.

• Stocks are not lottery tickets. There’s a company attached to every share.

• My advice for the next decade: keep on the lookout for a tomorrow’s big baggers. You’re likely to find one.