(BOSTON) Famed investor Peter Lynch, whose knack for picking winning companies helped millions of Americans make fortunes in stocks, is now urging the wealthy to follow his lead anew and give a lot of it back. To charity, that is.
'People who have been much luckier than everyone else should do more of the giving,' Mr Lynch, a vice-chairman at Fidelity Investments and trustee of the Lynch Foundation, said in a telephone interview.
The 66-year-old money manager, who earned his fortune by running Fidelity Investment's Magellan stock fund for more than a decade, is echoing the call to action billionaires Warren Buffett and Bill Gates made only days ago when they urged other billionaires to part with a chunk of their money.
'I hope it makes people think more of giving,' he said of Mr Buffett and Mr Gate's suggestion that other billionaires consider donating half their net worth.
Mr Lynch and his wife, Carolyn, announced on Sunday that they are making a US$20 million donation - their biggest ever - to support a programme to train principals at Boston College, the money manager's alma mater.
In the two decades since retiring from Magellan, Mr Lynch has stuck to what worked best for him - picking common stocks to make his foundation's money grow.
At Fidelity, Mr Lynch turned Magellan fund into a household name and the world's best performing mutual fund by increasing its value 700 times from US$20 million in 1977 to US$14 billion in 1990. Later, he wrote best-selling books that sent generations of Americans into equities.
Known for his shock of white hair and common sense approach to investing, Mr Lynch kept things simple by buying companies whose products he and his family used, like General Electric and the auto company Ford .
He also coined such axioms as 'Behind every stock is a company. Find out what it's doing.' Since retiring from running Magellan where the father of three routinely worked every weekend, Mr Lynch said he has concentrated on investing his foundation's money and mentoring younger analysts and portfolio managers at Fidelity.
'I'm like their older brother,' Mr Lynch said about guiding newcomers at the privately owned mutual fund giant in Boston.
His interest in passing on knowledge is now being spread very tangibly to education, long a favourite cause for Mr Lynch and his wife, who met as students at the University of Pennsylvania.
Discussing the project, Mr Lynch ticked of statistics making him sound exactly like the stock picker whose talent for numbers helped his investors earn a market-beating 29.2 per cent return at Magellan.
'The penalty of being a high school dropout is severe,' he said, laying out the low probability that people who do not finish high school face in finding decent work as the nation's unemployment rate hovers just below 10 per cent.
While Carolyn Lynch - whose father was a high school principal - runs the couple's foundation and searches for worthy causes, it is Peter Lynch's job as head of the investment committee to keep the millions growing.
According to 2008 IRS documents - the year the financial crisis decimated stocks - the Lynch Foundation had US$64 million. Documents for the previous year show US$113 million in 2007.
Over the years, Mr Lynch, who was sometimes seen in the Fidelity offices wearing sandals and holding his dog on a leash, hasn't changed much in the way he picks stocks. 'It is 99 per cent common stocks,' he said about how he invests the foundation's money.
But his frenetic work schedule has slowed over the years.'I don't work on Saturdays anymore,' he said.
Lynch also acknowledged lagging in the technological revolution and joked that his children had to teach him how to use a cell phone.
While sounding still very much like the stock picker he is, Mr Lynch also sounded like the philanthropist he has become in the last two decades. 'We are trying to make a difference where it counts,' he and his wife agreed.
Long ago, the Lynches - who have been married for 42 years - made education their cornerstone cause, supporting programmes like Teach for America and institutions ranging from Harvard Medical School to Marian High School in Framingham, Massachusetts.
The Lynches said they hope the programme to train principals will be duplicated in other cities around the country and eventually help narrow the divide between some of America's top-notch universities and what many call a crumbling public school system. -- Reuters
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