Peter Lynch Investment Analysis Prompt

This prompt is based on Lynch's 40 years of investment wisdom, covering growth analysis, PEG valuation, product understanding, competitive advantages, and earnings potential to help you discover multi-bagger growth opportunities. Paste it into ChatGPT or Claude and request a structured output: a one-sentence thesis, key risks, invalidation triggers, and a margin-of-safety range. Use it to organize research, not to outsource certainty—verify facts in primary sources and stay within your circle of competence. ⚠️ AI analysis is for reference only. Always conduct your own research before making investment decisions.

Full Prompt Content

Decision checklist (before you act)
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Write a 1-sentence thesis (what must be true)."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "List disconfirming evidence and invalidation triggers."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Define a valuation band or margin-of-safety range (avoid false precision)."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Set position sizing and risk limits before price moves."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Schedule a review date and update only on new evidence."
  }
}
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Getting Started
What is a ten-bagger and how does Lynch find them?
A ten-bagger is a stock that increases 10x in value. Lynch found them by investing in businesses he understood, analyzing growth potential, and buying at reasonable PEG ratios. He famously discovered Dunkin' Donuts, Taco Bell, and Home Depot this way.
What does 'buy what you know' mean?
Lynch advocates investing in companies whose products or services you personally use and understand. If you work in retail, analyze retail stocks. If you love a restaurant chain, investigate if it's a good investment. Personal experience gives you an information edge.
How to Use
What is a good PEG ratio according to Lynch?
Lynch prefers PEG ratios under 1.0, which indicates a stock is undervalued relative to its growth. A PEG of 0.5 is excellent, 1.0 is fair, and above 2.0 suggests overvaluation. However, always consider industry context.
How many stocks should I analyze before investing?
Lynch recommends analyzing at least 5-10 companies in the same industry to understand competitive dynamics. Compare their growth rates, profit margins, debt levels, and valuations before making a decision.
What does 'invest in what you know' really mean?
Lynch believed everyday consumers can spot great companies before Wall Street does - if you love a product or store, research the company behind it, but always verify the financials. It's not about blindly buying your favorite brand; it's about using your personal experience as a starting point for rigorous analysis.
Advanced Questions
Can this prompt help find 'ten-baggers' in today's market?
The prompt applies Lynch's growth-at-reasonable-price framework to identify companies with strong growth potential, though past patterns don't guarantee future results. It systematically evaluates PEG ratios, earnings growth, and competitive positioning to surface candidates that match Lynch's criteria for multi-bagger stocks.
Is Peter Lynch's approach still relevant for modern tech stocks?
Yes, Lynch's principles of understanding what you own and checking PEG ratios apply to any industry, including tech. The core idea - invest in businesses you understand, buy at reasonable valuations, and monitor earnings growth - is timeless regardless of whether you're analyzing software companies or retail chains.