Peter Lynch: From Golf Caddie to Magellan's $14 Billion and Ten-Baggers

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Peter Lynch was born in 1944 in Newton, Massachusetts, outside Boston. His father died of brain cancer when he was 10, and as a teenager he caddied at the Brae Burn Country Club, where one regular was D. George Sullivan, president of Fidelity Investments. As a Boston College sophomore studying history and philosophy, he bought Flying Tiger Airlines at $7 a share and watched it reach $80, paying for his education. At Wharton he clashed with the efficient market and random walk theories, then joined Fidelity as an intern in 1966 and full time in 1969 after two years in the Army.

In 1977 Lynch took over the Magellan Fund with about $18 million in assets; by 1990 it held $14 billion, with an average annual return of 29.2 percent. He held hundreds and sometimes over a thousand stocks, using small positions to stay in contact with management teams. His books, One Up on Wall Street and Beating the Street, promoted local knowledge backed by hard financial analysis under the growth at a reasonable price approach. After stepping down he applied the same thinking to philanthropy, backing First Night, City Year, Teach for America and Partners in Health.

• Fidelity colleague Joel Tillinghast described Lynch's tiny positions as a way to receive company mailings and attend shareholder meetings.
• Lynch invested in Dunkin' Donuts after noticing, as a Boston customer, its good coffee and constantly packed stores.
• His rule of thumb: a company growing earnings 20 percent a year should carry a P/E ratio below 20, and too much debt was a deal breaker.
• He borrowed the term ten-bagger from baseball for a stock that returns ten times its purchase price.
• A $10 million gift to Boston College established the Lynch School of Education and Human Development, and the Lynch Foundation holds over $125 million.