Mr PETER LYNCH

US fund manager Peter Lynch has one of the greatest investing track records of all time, while serving as the portfolio manager of Fidelity's Magellan Fund. An ordinary investor who put $1000 in the fund on the day Lynch took over would have had roughly $28,000 by the time Lynch stepped down 13 years later.That's an awesome 2800% return.

Despite those truly remarkable returns, Lynch was a passionate believer in the notion that the normal investor can pick stocks better than the average professional. In fact, he argued that the retail investor had numerous advantages that might allow him or her to outperform both the experts and the market in general. Below are three simple lessons from Lynch that will assist ordinary investors in their quest to beat the market.

1. Do the work

Peter Lynch is very well known for recommending that investors "BUY WHAT THEY KNOW". According to this principle, investors may want to invest in that busy restaurant on the corner that always seems crowded on Friday night.But this is not what Lynch meant, he expected investors to understand businesses before putting their money in them.He also stressed on the fact that you should "never invest in any company before you've done the homework on the company's earnings prospects, financial condition, competitive position, plans for expansion and so forth".

His favourite quotes were of Edison — "investing is 99 percent perspiration". In general, he believed that you need to "know what you own" and just thinking it will go up "doesn't count". As a result of this belief, Lynch figured that a part-time stock picker probably only has time to follow eight to 12 companies. And he warned that "if you don't study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards".

 2. Use your edge

           Lynch strongly believed that everyone has an edge that can allow them to outperform the experts. The key is to utilise your edge by investing in companies or industries that you understand well.He recommended that individuals identify three to five companies that they could know very well. You could study them, lecture on them, and understand their stories intimately. Ultimately, Lynch felt that ordinary folks needed to discover their personal edge, whether it was a profession or hobby or even something else — like being a parent.But no one can predict the market for sure.For example if you are buying shares of  a Telecom operator you could be definitely sure that the shares would definitly give you yeilds over a period of time if the company does well.

3. Be patient

             Being patient and investing for the long-term should be the simplest investing lesson of all. Sadly, it's one of those things that are easier said than done. In 1960, the average holding period for a stock was eight years; nowadays, it's just four months.Lynch often said that he had no idea what the market would do in one or two years. But he was confident about what stocks would do 10, 20, or 30 years from now. He truly believed that time was on the side of the retail investor, and that's why he was an enthusiastic in long-term investing.And yes, he was aware of some long time frames when the market didn't do well. In an interview, he referred to the period from 1966 to 1982 when the market was flat for the most part. But Lynch noted that you'd have still received dividends from your stocks. He also felt that corporate profits tend to trend upward, and that investors would eventually be rewarded for that.

"Have emotional strength to tide through bad times"

Lynch believed that it "pays to be patient, and to own successful companies". He understood that there are times when there doesn't appear to be a correlation between a company's operations and its share price. Lynch also knew, however, that "in the long term, there is a 100 per cent correlation between the success of the company and the success of its stock. This is the key to making money."