Dear investor Pedro Lynch has stated that it does not own artificial intelligence (AI) stocks, despite the sector’s recent rise. Lynch, known for his successful time at the Fidelity Magellan Fund during the 1980s, revealed his views in a podcast.
Last month, Lynch confessed during his appearance on “The Compound and Friends” podcast that his portfolio does not include AI stocks.
“I don’t have AI stocks. I literally couldn’t pronounce Nvidia until about eight months ago,” he said during the conversation.
Lynch, who achieved an average annual return of 29.2% during his 13 years at Magellan, has been watching the rise of AI from the sidelines. He declined to discuss his current portfolio or preferred stocks, citing Fidelity rules.
When asked if investors had chased AI trading too much, Lynch responded that he had “no idea.” He stressed the importance of understanding the companies in which one invests, a concept he fervently promotes in his book “One Up on Wall Street.”
Also read: Peter Lynch’s investment advice: If an 11-year-old doesn’t understand it, maybe you won’t understand it either
He also admitted to having limited knowledge of technology and described himself as the least technological guy. “I’m the least technological guy out there. I can’t do anything with computers. I only have yellow pads,” he said.
Lynch offered reassurance to employees worried about AI taking over their jobs, saying, “It’s a great country. We’re creative.”
His comments are timely, given warnings from executives at companies like Walmart and accent about the potential of AI to significantly transform their workforces.
Lynch’s stance on AI stocks is noteworthy given his successful track record as an investor. His lack of investment in the AI sector, despite its recent boom, could be indicative of his investment philosophy of thoroughly understanding a company before investing.
This approach, as he advocates in his book, could serve as a reminder to investors not to get carried away by the hype around a sector and to invest based on a deep understanding of the company and the industry.
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