“When people find a profitable activity — collecting stamps or rugs, buying old houses and fixing them up — they tend to keep doing it. Had more individuals succeeded at investing, my guess is they’d still be doing it. We wouldn’t see so many converts to managed investment,” said Peter Lynch. “How did so many do so poorly? Maybe they traded a new stock every week. Maybe they bought stocks in companies they knew little about, companies with shaky prospects and bad balance sheets. Maybe they didn’t follow these companies closely enough to get out when the news got worse. Maybe they stuck with their losers through thin and thinner, without checking the story. Maybe they bought stock options. Whatever the case, they failed at navigating their own course. “But I’m convinced that failure is unnecessary,” Lynch went on to say, “that amateurs can not only succeed alone but can beat the Street. First by taking advantage of the fact that they are amateurs — while a fund manager is more or les...

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