Peter Lynch

Lynch invented the phrase "tenbagger" — a stock that returns ten times your money. He was specifically looking for companies that could do that.

His method was deceptively simple: invest in what you know. Not what you know about macroeconomics or interest rates — what you know about everyday life.

What stores are you shopping at? What products are your kids obsessed with?

What new thing are you using that feels like it could be everywhere in five years? If you're noticing a company before Wall Street analysts have caught on, you have a real edge.

He categorized stocks into six types: slow growers (stable, boring), stalwarts (big companies, modest returns), fast growers (small and aggressive — where the tenbaggers live), cyclicals (tied to economic cycles), turnarounds (troubled companies that might recover), and asset plays (companies with hidden value the market hasn't priced in). His genius was applying rigorous fundamental analysis to companies most Wall Street analysts dismissed as too small or too mundane to bother with.

Joel Greenblatt

Greenblatt made his original fortune through special situations investing — spinoffs, mergers, restructurings, situations where a company goes through some event that causes normal investors to sell without fully understanding what they''re selling. His book "You Can Be a Stock Market Genius" is the definitive guide to this approach.

The core idea is that temporary confusion creates permanent mispricing.

His public-facing work is built around the "Magic Formula" — a systematic method of ranking companies by earnings yield and return on capital, then buying the cheapest, best-quality businesses and rotating the portfolio annually. He tested it on 17 years of data.

It worked. The appeal is that it removes emotion entirely: you run the formula, you buy the list, you don''t deviate.

It''s systematic value investing that any individual investor can implement with a screener and a brokerage account.

Peter Lynch

He believed the average person has a real edge over professional fund managers — specifically the access to everyday life that analysts in offices don't have. You know which stores are packed on Saturday afternoon.

You know which new products your kids are obsessed with. Wall Street analysts often don't.

His most repeated principle: invest in what you know. His second: love a company's product is not sufficient on its own — you still need to understand the fundamentals.

Third: stomach matters more than brain in investing. The biggest thing separating successful investors from unsuccessful ones isn't intelligence — it's the ability to stay calm when the market drops 20 percent and everything feels like it's ending.

Joel Greenblatt

Greenblatt''s philosophy is that the market is not always right, but it''s right most of the time — and the times it''s wrong are predictable if you know where to look. Spinoffs are mis-owned.

Bankruptcy restructurings are under-analyzed. Post-merger stubs are ignored.

These are repeatable, structural mispricings, not random luck. His other core belief is that you don''t need complexity to beat the market.

The Magic Formula is simple by design. If something can''t be explained in a paragraph, he doesn''t trust it.

Peter Lynch

Lynch ran a very diversified portfolio — sometimes over 1,000 positions — which cuts against the concentration gospel of Buffett and Munger. He justified it simply: if you find enough genuinely great small companies, you don't need to pick just one.

Some will fail. The tenbaggers more than compensate.

He wasn't reckless — he did detailed fundamental research on every holding. But he was comfortable owning things that looked messy or unfamiliar on the surface if the numbers told a better story.

He famously said he'd rather own 20 stocks he didn't know well than five stocks he thought he knew perfectly. The point being: false confidence in a concentrated position kills you.

Breadth buys time.

Joel Greenblatt

Greenblatt''s original risk approach was highly concentrated — Gotham Capital ran 5–8 positions, each thoroughly researched. His thesis was that if you truly understand the situation, concentration is not risky: it''s owning more of something good.

The risk came from being wrong about the situation, not from owning too few companies.

His later Magic Formula approach is more diversified — the formula builds a portfolio of 20–30 stocks — which reduces individual position risk while capturing the systematic returns from value and quality factors. For retail investors, he argues this level of diversification is sufficient if the selection process is disciplined.

Peter Lynch

After retiring from Magellan in 1990, Lynch has spent most of his time on philanthropy. He and his wife Carolyn donated tens of millions to education through the Lynch Foundation, focusing on Catholic education and scholarship programs in Massachusetts.

He lives quietly for someone worth hundreds of millions. He speaks at Fidelity events occasionally, plays golf, and is generally not seeking attention.

He has said that the best decision he ever made was retiring at 46 — that no amount of money is worth missing your kids grow up.

Joel Greenblatt

Greenblatt is notably private for someone with a significant public profile. He lives in New York, donates heavily to education causes, and has largely avoided the hedge fund celebrity circuit.

He taught at Columbia Business School for years — adjunct professor, not tenured — and treated teaching as a genuine side calling, not just self-promotion. His books are priced like paperbacks, not $997 courses.

That alone separates him from most finance educators.

Peter Lynch

Fannie Mae. Lynch bought it heavily in the mid-1980s when almost nobody wanted it.

It was a housing finance company drowning in problem mortgages. Lynch dug into the fundamentals and decided the problems were fixable and the underlying business was genuinely valuable.

He was right. The stock went from roughly $2 to $40.

That single position generated hundreds of millions for the fund. His Chrysler bet was similar — he bought heavily when the company was a bankruptcy rumor and almost no one else would touch it.

Both worked because Lynch was willing to do the research on things everyone else had already decided were too ugly to look at.

Joel Greenblatt

The Gotham Capital era from 1985 to 1994 is the biggest win. Approximately 50% annualized gross returns for a decade.

The exact mechanics varied — spinoffs, workouts, value situations — but the result was one of the most consistent runs of outperformance in hedge fund history. Some of his best individual trades came from spinoffs: companies that are spun off from larger parents tend to be misunderstood and mis-owned (institutional investors who didn''t want the spinoff dump the shares), creating a window to buy quality businesses at a significant discount.

That insight was the core of his original edge.

Peter Lynch

Selling great companies too soon. He got into Walmart early and sold too soon.

He did the same with several other retailers that went on to become enormous. By his own account, his biggest mistake pattern was taking profits on genuine multi-decade compounders before they had compounded enough.

He also acknowledged that managing a $14 billion fund was fundamentally different from managing $18 million. The sheer size limited which companies he could meaningfully invest in — you can't move the needle on a $14 billion fund by buying a $50 million company.

He burned himself out keeping up with over a thousand positions. He retired at 46.

He's said he doesn't regret it.

Joel Greenblatt

Greenblatt has been relatively quiet about specific losses, which is either admirable discipline or good PR management. The honest critique of his career is the second-act problem: Gotham Asset Management''s quantitative value approach has had meaningful periods of underperformance, particularly during the 2010s when growth stocks dominated and systematic value investing struggled badly.

From 2014 to 2020, value strategies broadly failed to deliver. He has remained committed to the approach — which is consistent with his philosophy — but it means some investors in his funds had a rough decade.

Peter Lynch

Peter Lynch grew up in Newton, Massachusetts. His father died when Lynch was 10, and his mother had to work to keep the family going.

Lynch caddied at the Brae Burn Country Club to help out. One of his regular clients was D.

George Sullivan, president of Fidelity Investments. Sullivan eventually offered Lynch a summer job at Fidelity — the kind of break you earn by showing up and doing the work.

Lynch studied history, psychology, and philosophy at Boston College — not finance — and said later that was probably an advantage. Too many finance students learn to look at spreadsheets and miss the obvious things happening in front of them.

He got an MBA from the Wharton School, joined Fidelity full-time in 1969, and took over the Magellan Fund in 1977. At the time, Magellan had $18 million in assets and was closed to new investors.

When Lynch retired at 46 in 1990, it had $14 billion and was the largest actively managed mutual fund in the world. He beat the S&P 500 in 11 of his 13 years managing it.

He's been a vice chairman at Fidelity in an advisory capacity ever since.

Joel Greenblatt

Joel Greenblatt grew up in Great Neck, New York, and was a finance nerd from early on. He went to Wharton for undergrad and then got his JD/MBA from Wharton as well — staying in the same place twice in a row, which tells you something about how much he liked it.

He started Gotham Capital in 1985 with a $7 million seed investment from Michael Milken (yes, that Michael Milken), which is either a great origin story or an awkward one depending on your view of junk bond history.

Gotham's results were absurd. From 1985 to 1994, the fund returned approximately 50% annualized gross returns before returning outside capital to investors.

He made himself and his partners wealthy, then essentially closed the fund to outside money because he didn't need it. He then spent the next decade teaching at Columbia Business School and writing books that made his investing approach accessible to ordinary people.

In 2009 he started Gotham Asset Management, a new vehicle that runs quantitative value strategies.

Peter Lynch

His entire professional life ran through Fidelity Investments. He managed the Magellan Fund from 1977 to 1990 — 13 years of sustained outperformance that has never been matched at that scale.

His major holdings during that run included Fannie Mae, which he rode from $2 to $40; Chrysler, which he bought near bankruptcy; and various retailers that nobody on Wall Street wanted to touch.

He was famous for finding companies in everyday life before analysts noticed them. He found Dunkin' Donuts because his wife liked the coffee.

He investigated L'eggs pantyhose after his wife bought them at a grocery store. He'd walk through a shopping mall and watch which stores were packed and which were empty — and then go home and read the financials to see if the story held up.

Joel Greenblatt

Gotham Capital, his original hedge fund from 1985, is the thing the legend is built on. 50% annualized gross returns for a decade is one of the best long-duration track records in investment history.

He returned outside capital in 1994 because managing too much money would have crushed his returns — which is a sign of someone who actually understands investing, not just fundraising.

Gotham Asset Management, launched in 2009, runs quantitative value strategies using his "Magic Formula" approach. It manages several billion dollars across multiple funds.

The track record since 2009 has been solid but not legendary — large-scale quantitative value investing is a different game than the special situations work that built his original reputation.

He is also on the board of Harlem Children''s Zone, a nonprofit he cares deeply about, and has donated tens of millions to education initiatives.

Peter Lynch

Boston College, class of 1965 — history, psychology, philosophy. Wharton School of Business, MBA.

He's on record saying studying history at Boston College was more useful for investing than anything he learned at Wharton. The historical pattern recognition, the ability to contextualize events — that showed up in how he thought about cycles and companies.

Joel Greenblatt

University of Pennsylvania (Wharton), BS in Economics, 1979. University of Pennsylvania (Wharton), JD/MBA, 1980.

The double Wharton is unusual. Most people do one or the other.

He did both in consecutive years, which suggests either extraordinary efficiency or an extreme affinity for Philadelphia.