Beating the Street

By Peter Lynch with John Rothchild

“When Magellan was launched, I was a student at Boston College, caddying golf games on weekends. This was during the great fund boom, when everybody wanted to buy funds. The fund mania even reached my own mother, a widow of limited resources. A schoolteacher who was moonlighting as a part-time fund salesman convinced her to buy Fidelity Capital. She liked the fact that “a Chinese guy” was running it, because she believed in the brilliant Oriental mind. The Chinese guy was Gerry Tsai; he, along with Ned Johnson at Fidelity Trend, were fund managers sui generis in that era.


My mother never would have known that a Chinese guy was running the Fidelity Capital Fund if the salesman hadn’t told her. A flotilla of fund floggers traveled the countryside, many of them part-timers, making house calls along with the vacuum cleaner, insurance, burial plot, and encyclopedia salesmen. My mother agreed to a plan in which she would invest $200 a month, forever, to secure us a prosperous future. This was money she did not have, but Fidelity Capital outperformed the S&P, as it tripled in the 1950s and doubled again during the first six years of the 1960s.”