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A Potential Buffett Target with a Peter Lynch Twist - Views on News from Equitymaster

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  • Feb 19, 2018 - A Potential Buffett Target with a Peter Lynch Twist

A Potential Buffett Target with a Peter Lynch Twist
Feb 19, 2018

Like his contemporaries, Peter Lynch's words of advice for the small retail investor are extremely endearing. But there is one key differentiation. While the others suggest reading and understanding businesses, Lynch has suggested looking for the 10-baggers everywhere. And that even a neighborhood grocery store could offer some cues. But then investors started taking his advice so literally that Lynch had to give this disclaimer...

  • I've never said, if you go to a mall, see a Starbucks and say it's good coffee, you should call Fidelity brokerage and buy the stock.

In other words, Peter Lynch wanted investors to use their respective specialized knowledge. First, to home in on stocks they can analyze and study. And then to decide if they're worth owning. His ideology, is therefore, a colloquial version of Buffett's own principle of 'investing in what you know'.

Now, a visit to a department store or a mall at least gives you a good sense of what most consumers are buying. And in some cases, you can analyze what virtues of the products are attracting customers.

More than a decade back, one company figured out that the key criteria customers look for in organized retail is good packaging for the products. And since then has used this 'Peter Lynch criteria' to endow its P&L with 'Buffett-would-buy' numbers.

Allow us to explain...

TCPL Packaging

Way back in the year 2000, the management of a company wrote this in the annual report...

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Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

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DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report.
  2. Equitymaster holds 1 share of TCPL Packaging as per the guidelines prescribed by the Board of Directors of the Company. The investment is made for research purposes only.
  3. Equitymaster has no other financial interest in TCPL Packaging.
  4. Equitymaster's Associates and Research Analyst or his/her relative doesn't have any financial interest in the subject company.
  5. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject company at the end of the month immediately preceding the date of publication of the research report.
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