Peter Lynch’s mantra: Average investors can become experts in their own field and can pick winning stocks as effectively as professionals by doing just a little research. Investment opportunities abound for the layperson.By simply observing business developments and taking notice of your immediate world – from the mall to the workplace – you can discover potentially successful companies before professional analysts do.Gaining this edge on the experts is what produces ‘tenbaggers’; stocks that appreciate tenfold or more and thus turn an average portfolio into one that’s a star performer.Investors who get in early, almost at the beginning, end up making boatloads of dough.In the 13 years Lynch ran the Magellan fund from Fidelity, he outperformed the S&P 500 stock index no less than 11 times.Lynch promises that if you ignore the ups and downs of the market and the endless speculation about interest rates, in the long-term (anywhere from five to fifteen years) your portfolio will reward you.Lynch loved growth stocks and had his biggest gains when he invested in stocks of companies that were hot at the time. As they ascended into the highest arc of their growth phase, their share prices sizzled and he cashed in.
1. Has the company avoided excess debt?
2. Are profit margins high and increasing?
3. Is the stock selling at a discount to its real value?
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