Peter Lynch Quotes

Approaches to determining stock values vary, but fundamentally, each company judging itself undervalued is saying that its future stream of earnings justifies a higher price than the stock market is willing to accord it.

To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.

Whenever you hear a discussion about the short-term swings in any given stock's price, your immediate thought should be whether it matters to why you are investing.

Cerner has significant growth opportunities. We believe there is leverage with HNA Millennium and in our business model that can grow both our top-line and earnings during 2000 and through the foreseeable part of this decade.

What you pay for an investment is the single biggest determinant for how successful that investment will be. When equity prices are high, your returns will be lower. When they are cheap, your returns will be higher.

Warren Buffett is famous for talking about the 'intrinsic value' of stocks. But while many people parrot this phrase, few know what it really means.

Just because a stock is down doesn't mean it's a great buy.

When it comes to valuation, there's only one thing stock investors really care about, which is earnings.

For the most part, earnings and market value growth are a result of reduced expenses.

We absolutely take no decisions based on the share price, not for LVMH.

What we are doing is increasing our focus on cash flow, return on investment, and value creation.

Assessing management quality is clearly one of the most important aspects of an investment decision.

A price decline is of no real importance to the bona fide investor unless it is either very substantial say, more than a third from cost or unless it reflects a known deterioration of consequence in the company's position. In a well-defined bear market many sound common stocks sell temporarily at extraordinary low prices. It is possible that the investor may then have a paper loss of fully 50 per cent on some of his holdings, without any convincing indication that the underlying values have been permanently affected.

When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn't know what he means, and there is a good chance that the man who uses it doesn't know what it means.

Focus on return on equity, not earnings per share.

To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.

It's quite clear that stocks are cheaper than bonds. I can't imagine anybody having bonds in their portfolio when they can own equities, a diversified group of equities. But people do because they, the lack of confidence. But that's what makes for the attractive prices. If they had their confidence back, they wouldn't be selling at these prices. And believe me, it will come back over time.

Warren Buffett has said many times that people either get value investing in five minutes or they won't get it in five years. So, there is something in the human brain, that for some of us, makes all the difference in the world right away and the patience it requires is part of the wiring process.

I believe that the mutual fund industry's biggest shortcoming is too much focus on the momentary price of a stock - an illusion - and too little focus on the intrinsic value of the corporation - the ultimate reality. I'm comforted by the fact that Warren Buffett feels the same way.

Knowledge is only one ingredient on arriving at a stock's proper price. The other ingredient, fully as important as information, is sound judgment.

You must value the business in order to value the stock.

In most cases the favorable price performance will be accompanied by a well-defined improvement in the average earnings, in the dividend, and in the balance-sheet position. Thus in the long run the market test and the ordinary business test of a successful equity commitment tend to be largely identical.

A speculator gambles that a stock will go up in price because somebody else will pay even more for it.

All intelligent investing is value investing - acquiring more that you are paying for. You must value the business in order to value the stock.

What goes down usually goes back up, if you're willing to be patient and don't hit the panic button.