AAII Stock Ideas: Lynch Screening Strategy

Thirteen Tips and Stock Ideas From Legendary Stock-Picker Peter Lynch

Peter Lynch offered investors deep insight in his book “One Up On Wall Street.” Lynch was careful to warn his readers that it was important to first analyze oneself before spending any time analyzing companies. Lynch even provided in his bestselling book a list of the most important qualities it takes to succeed:

  • Patience
  • Self-reliance
  • Common sense
  • Tolerance for pain
  • Open-mindedness
  • Detachment
  • Persistence
  • Humility
  • Flexibility
  • Willingness to do independent research
  • Willingness to admit mistakes
  • Ability to ignore general panic
  • Discipline to resist your human nature and your gut feeling

Short-Term Pain for Long-Term Success

Recent stock market volatility reminds us that long-term stock market success requires a certain detachment and tolerance for short-term pain. As Lynch pointed out, stocks will go up and down, and rather than panic when they go down, you must have detachment to stay the course. Peter Lynch warned investors “when you sell in desperation, you always sell cheap.”

AAII has developed a quantitative stock filter, or stock screen, with the goal of identifying stocks possessing the fundamental characteristics Lynch looks for when selecting stocks. Thirteen Lynch-inspired prospects are presented below.

Stocks Passing the Lynch Screen (Ranked by Dividend-Adjusted PEG Ratio)



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American Association of Individual Investors

American Association of Individual Investors


Since inception in 1978, the nonprofit AAII has helped over 2 million individuals build their investment wealth through programs of education and publications.