Peter Lynch. Hunting for desyatikratnitsu

Peter Lynch. Hunting for desyatikratnitsu

The newspaper "The Wall Street Journal" called Peter Lynch one of the greatest investors in history for his remarkable work as a manager of a well-known fund Madzhellan Fand "(Magellan Fund), belonging to" Fidelity "(Fidelity). When Lynch led him in 1977, the fund had shares of 45 companies, worth about $ 20 million by the time when in 1990 he withdrew from active participation in the "Fidelity" to spend more time with his family, the fund put assets in1,200 enterprises and was worth nearly 13 billion dollars. Visiting more than 500 companies a year and talking every week with dozens of executives, Lynch brought a remarkable profit. An investor who invested in 1977 in a 10,000 home. in 1990, could carry 280,000 house. Not all investments are based on thorough research; For example, he bought shares in the company, "Taco Bell" (Taco Vell), after the way they tried to burritos.

Lynch, who grew up in a suburb of Boston, first learned about investing 11-year-boy caddy, golf clubs podnosyaschim at a local country club, where he listened to conversations about money managers steep, consisting of its members. He was forced to work, his father died when he was 10 years old, and Lynch had to help support his family. He went to school in "Boston College" on the caddy scholarship and later studied at Wharton, where he earned an MBA, and, finally, in 1969 adopted the "Fidelity". He started a research analyst, specializing in the steel industry. In 1974 he was promoted to the post of Director of Research Department, and three years later was appointed head of the fund "Madzhellan."

Instead it simple investment philosophy states: "Choose a company that can handle any fool - because sooner or later a fool, probably his, and lead." In the 80 years he despised Lynch merger mania that gripped the country, preferring to invest in the more prosaic features such as online funeral - that eventually will need everyone. Another of his favorite maxim: "Know what you own, and be able to explain this twelve-child for a minute." To find such stocks, he advises to look close to home, where every day you come in contact with the goods and services producing their companies. In his essay, "The Hunt for desyatikratnitsu" (Stalking the Tenbagger), it shows how one of these small companies can easily turn into a glorified desyatikratnitsu, a company whose shares have the potential to grow tenfold.



The best place to start searching desyatikratnitsy close to home - if not in the backyard, then at the mall and especially where you work. Most desyatikratnits ... - "Dunkin Donuts", "Ze Limited", "Subaru", "Dreyfus", "McDonalds", "Tarn-Brands" and "Pep Boys" - the first signs of success have been observed in hundreds of locations across the country. Firefighter in New England, consumers in Central Ohio, where he began work first restaurant, "Fried Chicken Kenttaki" crowd in "Pay-n-Save", all had to say: "This class, I wonder if they have any action" - long before Wall Street caught what was happening.

The average person is likely to meet with prospective companies, two or three times a year - sometimes more. Executives "Pep Boys" Clerks "Pep Boys", lawyers and accountants, suppliers, "Pep Boys", a company to do advertising, artists, trademark, builders, erecting new stores, and even people myvshie floors, all should have seen the success of "Pep Boys". Thousands of potential investors have received this "hint", and this is even without considering the hundreds of thousands of customers.

At the same time employee "Pep Boys" that adorned the insurance for the company, could see that the cost of insurance has grown - a good indication that the insurance industry is preparing to turn around - and perhaps he should think about investing in the providers of insurance services. Or maybe the builders - contractors "Pep Boys" - noticed that the cement prices have strengthened, and this is good news for companies supplying cement.

The entire length of the retail and wholesale chains people that produce things, sell things, cleaning things and review things, encounter numerous opportunities for stock selection. In my own case - mutual fund industry - vendors, employees, secretaries, analysts, accountants, telephone operators and installers of computers, all unit-BR is a great boom to overlooked in the early 80s, which led to tremendous growth in the value of the shares of mutual funds.

You should not be vice president, "Exxon" to feel the growing prosperity of this company, or a reversal in oil prices. You can be a laborer in the oil fields, a geologist, buriltsschkom, supplier, owner of the petrol station, mechanic or even a customer at a gas station.

You do not need to work at the headquarters of "Kodak" to learn that a new generation of inexpensive, easy to use, high-quality 35-millimeter camera from Japan revives the photographic industry, and sales films for cameras are growing. You can be a seller of film, camera shop owner or employee at the store cameras. You can be a local wedding photographer, we see that five or six families are taking their pictures at the wedding and prevented him from making good pictures.

No need to be Steven Spielberg to understand that a new blockbuster movie or a series of blockbusters are going to cause a significant rise in revenue, "Paramount" or "Orion Pictures". You can be an actor, extras, director, stuntman, a lawyer, a brigadier, makeup or ticket collectors at a local cinema, where the standing room filled with six weeks in a row that "pushes" to check all "for" and "against" investing in stocks, "Orion."

Maybe you're a teacher, and school board chooses your school to test a new gizmo, a leading attendance records, saving thousands of hours of teachers being wasted in counting children. And the first question I ask: "Who produces this stuff?"

And how about the firm "Ogometik deyta prosessing" (Automatic Data Processing), calculates payroll for nine million workers in 180,000 small and medium-sized companies in a week? It was one of the greatest opportunities in history: the company transformed into a public corporation in 1961 and every year without interruption increased revenues. The worst of its rate - 11 percent increase over the previous year. It happened during the recession in 1982 - 83 years, when many companies have suffered losses.

The company "Ogometik deyta prosessing" by ear is perceived as a kind of high-tech enterprise. I'm trying to avoid them, but in reality it is not a computer company. The firm uses computers for payroll, and most of the benefit of high technology users. As soon as the competition leads to lower prices on computers, companies like "Ogometik Data", are able to buy cheaper equipment, so its costs have been declining. This only increases profits.

Without any fanfare it everyday business, in their time to release their stocks of six cents per share (adjusted for the break-up), now sells for $ 40 - shestisotkratnitsa, with long-term perspective. Before the October crash of its price rose to $ 54 The company has assets of two times greater than the debt, and shows no signs of slowing down development.

Managers and employees of client companies 180.000 definitely could have known about the success of "Ogometik deyta prosessing", and because many of the biggest and best customers "Ogometik Data" are notable brokerage houses, would know about it and half of Wall Street.

How often do we try to find winning stocks, while winning stocks tend to find us.


DESYATIKRATNITSA AND TREATMENT OF ULCERS
Can not imagine such a possibility in your life? What if you had gone to bed, living ten miles from the nearest traffic light, grow your own food and do not have a TV? Maybe one day you will need to go to the doctor. Country Life has given you an ulcer, and this is an excellent introduction to the "SmithKline Bekmen" (SmithKline Beckman).

Hundreds of doctors, thousands of patients and millions of friends and relatives of the patients had heard of the miraculous medicine "Tagamet" (Tagamet). It appeared on the market in 1976. Knew about it and the pharmacist in charge of pills, and errand-boy, carrying half their working day, delivering them. "Tagamet" was a boon for those suffering and "gold mine" for investors.

An excellent remedy in terms of the patient, which cures the disease once and for all, but other than medicine, with an investor's perspective, then, that the patient must continue to buy. "Tagamet" one of the latter. He gave a fantastic relief of ulcer pain, and people just enjoying this blessing, we had to take it all the time, making it the shareholders' SmithKline Bekmen ", the creators of" Tagamet "indirect beneficiaries. Mostly due to "Tagamet", the company's stock price rose from $ 7 in 1977 to 72 dollars in 1987.

Consumers of this medicine and who subscribes to it, had a big advantage over the talent on Wall Street. No doubt, some of oxymorons themselves suffered from a stomach ulcer - a nervous business - but it should be, "SmithKline" was not included in their list of stocks to buy, because a year had passed before the company's stock began to rise. During that period, the drug in 1974 - 76 years the price rose from about 4 to 7 dollars, and the government in 1977 approved a "Tagamet", the shares were sold at $ 11 Since then, they have grown to $ 72 per

But if you missed "Tagamet", you had a second chance with "Ptakso" (Iaho) and its own wonderful remedy for ulcers - "Zantac" (Zantac). "Zantac" has passed the probationary period in the early 80s and has been approved in the U.S. in 1983. "Zantac" was adopted as well as "Tagamet" and became "Ptakso" in the same profitable. In mid-1983 the action "Glaxo" sold for 7.5 dollars and grew to $ 30 in 1987. We bought the doctors prescribing "Tagamet" and "Zantac" action "SmithKline" and "Tlakso?" Somehow I doubt that many have bought. Is more likely that doctors have been fully engaged in investing in oil shares. Maybe they heard that the "Union Oil" from California, a candidate for a merger. At the same time, senior officials, "Union Oil" is likely to buy stocks of companies that manufacture drugs, particularly hot stocks like "American Surgery senters" (American Surgery Centers), which 1982 sold for U.S. $ 18.50 and then dropped to 5 cents.

In general, if you conduct a survey of all doctors, I bet only a small percentage of them are invested in shares of healthcare companies, and the most invested in shares of oil companies, and if a poll of owners of shoe stores, would be that the more invested in aerospace, than in a shoe, while aerospace engineers more, it seems, are interested in a shoe company. I do not understand why the stock certificates, as well as the grass is always greener on someone else's pasture.

Maybe because profitable investment in itself seems so incredible that people find it easier to imagine that it is somewhere as far as possible, somewhere in the Grand Outland, just as everyone seems to us that the ideal behavior is possible only in heaven but not on the ground. Therefore, the doctor who knows the inner drug business inside and out, feels more comfortable investing in "Shlamberger" (Schlumberger), neftetoplivnuyu company of which he knows nothing, while managers' Shlamberger "is likely to own shares," Johnson Johnson "(Johnson & Johnson) or the" American Home Products "(American Home Products).

True, true. It is not necessary to know anything about the company that its shares rose. But the main thing is that (1) Experts on Petroleum, on average, are better placed than doctors to decide when to buy or sell stocks, "Shlamberger" and (2) doctors usually know better than experts Oil, when investing in a successful drug. A person who has the advantage, can always outsmart a person without it - who in the end will be the last that experience significant changes in the industry.

Oilman, investing in "SmithKline" because it is offering its broker, did not realize that the patients refused "Tagamet" and switched to a competing medicine for ulcers, as long as stock prices will not fall by 40 percent and will be bad news fully "addressed" in the price. "Accounting" - a Wall Street euphemism used to pretend that unexpected events have been foreseen.

On the other hand, the oil industry will be among the first to see signs of recovery in the oil business recovery, which will inspire, ultimately, the return of "Shlamberger."

Although people who buy shares in which they do not understand, can sometimes get lucky and they get huge profits, it seems to me they create their own unwanted noise, just like a marathon runner, decided to risk his reputation in the bobsleigh races.


DOUBLE ADVANTAGE
In this essay, we talked about the oil company executives and their knowledge, and in the same chapter, dumped him and his knowledge in a heap together with the knowledge of customers standing in line at the cashier in the "Pep Boys". Of course, it is absurd to claim that one still steep. One - the knowledge and professional understanding of the mechanism of the industry, another - a consumer awareness of an attractive product. Both are useful in selecting stocks, but in different ways.

Professional advantage is particularly useful to know when to buy and when not to buy stocks of companies that exist for some time, especially those related to the so-called cyclical industries. If you work in the chemical industry, you will be among the first to realize that the demand for PVC is growing, prices are rising, and warehouse surplus decrease. You'll know what the market does not have new competitors, and not building new refineries, and that such construction is required from two to three years. All of this means higher profits for existing companies that manufacture these products. Or if you own a store that sells tires by "Goodyear" (GoodYear) and suddenly, after three years of sluggish sales of notice that has not kept pace with new orders. Ego means that you have just received a strong signal that the firm "Goodyear" could be on the rise. You already know that the new high-performance tire company "Goodyear" is the best. You call your broker and ask for the latest information on bus companies, rather than wait until the broker will call you to talk about "Van leboretoriz" (Wang Laboratories).

What you benefit from the tips regarding the company's "Van" if you do not work in a company related to computers? What you can learn a thing much better not to know thousands of other people? If erreT "necessary", then you have no advantages in terms of "Van". But if you sell tires or produce tires, you have an advantage in relation to the company, "Goodyear". Throughout the supply chain manufacturing industry people, produce and sell goods, faces many choices of promising stocks.

This may be a service industry, business, insurance-related property damage from an accident or even a book business, where you can see the pivot point in development. Buyers and sellers of any product shortages and surpluses of notice, the changes in prices and demand. This information is not very valuable in the automotive industry as car sales reports are issued every ten days. Wall Street is obsessed with cars. But in most other cases, a simple observer can determine the turn at six - twelve months earlier than usual financial analysts. This gives a tremendous advantage in anticipation of improvements to earnings and profits, as you will, make the shares go up in price.

Your account may not necessarily involve a reversal in sales volume. It may be that a company of which you know something, have huge hidden assets that are not reflected in the balance sheet. If you are working with real estate, you know what department store chain has four city blocks in downtown Atlanta, listed in the books at prices that existed before the Civil War. This is definitely a hidden asset, and these opportunities can be found in gold, oil and timber industries otpaclyah and television stations.

Are you looking for a situation in which the value of assets attributable to each share exceeds the price of the stock itself. In such cases, you can admirable in every sense of the word to buy a penny's worth dimes. I myself went through this many times.