Lay Out Your Investment Thesis Using Peter Lynch’s Cliff Notes Approach

If you are striving to sharpen your critical thinking skills to cultivate and improve your stock picking process, the use of Cliff Notes is a great way to achieve that goal.

An added bonus is that they offer the benefit of quickly and swiftly sifting through your research pipeline.

My first investing hero was my dad. However, my second investing hero became Peter Lynch after my dad gave me his book, One Up On Wall Street, to read.

Peter Lynch was a huge advocate of Cliff Notes, so it’s fitting that one of my favorite video clips of 2023 was when Tim Heitman discussed his time working at Fidelity while Peter Lynch was managing the Magellan Fund between 1977 to 1990, racking up an annual average return of 29.2%. Tim talked about Lynch’s “Cliff Note” approach to quickly laying out a stock pitch.

I religiously used a Cliff Notes at the beginning of my investing journey over 30 years ago. Frankly, early on, I just wasn’t qualified to write full research reports.

Preparing Cliff Notes forces me to really think about finding the most important parts of a bullish thesis and enables me to plow through a long list of stocks entering my research pipeline.

I encourage investors at any level to do the same. I still use the process today.

It also forces you to identify some of the most relevant risks.

Cliff Notes should also encompass your future research tasks that you need to accomplish to either gain conviction or shelve an idea.

I guarantee it will make you a better investor.

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