“ Could not pronounce nvidia ” 8 months ago

Legendary investor Peter Lynch built a reputation to regularly beat the market while supervising Fidelity Magellan Fund in the 1980s. Decades later, he has advice for the next generation of investors.

The boom of artificial intelligence has dominated the market over the past three years, but Lynch, which has an annual return of 29.2% on average during its 13 years at the head of Magellan until 1990, was happy to look from the sidelines.

“I have no actions AI,” said Lynch on the Podcast “The Compound and Friends” with investor Josh Brown. “I could literally not pronounce Nvidia Until about eight months ago. “”

Lynch, who said that at one point, 1 out of 100 Americans had a participation in Fidelity Magellan, on the Podcast addressed his career, the lessons he learned along the way and, yes, the craze today for all linked to artificial intelligence. Here are five of the biggest dishes to remember:

Sitting on AI

The actions of Megacap Tech have flown since the introduction of Chatgpt at the end of 2022, which led a lot to Wall Street to wonder if the IA trade recalls the Dot-Com bubble in the late 1990s. When asked if investors had driven the trade of AI too far, Lynch said that it had “no idea”.

Lynch said that he did not understand technology enough to have an enlightened opinion on market optimism towards AI.

“I am the lowest technological guy of all time,” he said. “I can’t do anything with computers. I just have yellow stamps.”

Lynch refused to discuss his current portfolio or the actions he loves at the moment, citing Fidelity rules.

Why don’t you “play the market”

Lynch has long pleaded that investors have an in -depth understanding of the companies in which they invest. It is a basic principle of his book “One up on wall street”.

“I have this expression:” Know what you have, “said Lynch.” If you don’t understand what you have, you are toast. “”

Lynch said people will spend hours looking for flights to make sure they get the best price. But when it comes to investing, he said: “They will put $ 10,000 in crazy actions they heard on the bus.”

He described the expression “playing the market” as “horrible” and “dangerous”. Instead, Lynch said people should buy good businesses and become aware of what they are doing.

Lynch said that the average variation in typical New York stock market security during a given year is 100%, so investors must know what to do when large movements occur.

Go after the first round

Although conventional wisdom is to buy actions before taking off, Lynch warned against the medal of all investment ideas simply because a guarantee has already rallied.

“Sometimes you don’t have to be in the first round,” said Lynch.

For example, Lynch underlined McDonald’sHe was told a long time ago, had already experienced rapid interior growth. The Hamburger chain continued to see strong growth when it has developed internationally.

“People said” McDonald’s was finished “,” said Lynch. “They just didn’t think about it.”

Investment benefits today

Today’s investors have “cushions” that did not exist before the Great Depression and the New Deal, according to Lynch.

Lynch has appointed unemployment insurance, social security services and the creation of the Securities and Exchange Commission helping people every day over time. He also underlined the active role of the federal reserve in recent decades.

Today, investors benefit from “so many things that are better,” said Lynch, noting more “economic stamps and economic” buffers “than in the past.

Lynch said that investors have frequently prepared an economic collapse on the 1930s order. But none of market tests since then, even the global financial crisis in 2008-2009, has had the same declining intensity.

“We have had many opportunities to have a” big “,” said Lynch. “We probably had bad presidents, bad congresses, we had bad economists and we succeeded.”

Future of work

Lynch reassured the workers who wonder if they will lose their jobs against AI.

In the early 1980s, around a million people worked for At & t Alone at a time when the whole workforce amounted to around 100 million. Even if the telecommunications sector has grown up, Lynch said that the main companies today employ around 400,000 workers.

Today, the American workforce itself has swelled 160 million jobs. Americans can probably count on expansion in certain sectors to help compensate for elimination linked to technological advances or automation in others.

Lynch’s comments come as managers of companies ranging from Walmart has Emphasis warned that artificial intelligence would considerably reshape their workforce.

“It’s a big country. We are creative,” said Lynch. “America creates, duplicates in China and Europe legislate.”

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