You shouldn't just pick a stock - you should do your homework.
Peter LynchRead
When management owns stock, then rewarding the shareholders becomes a first priority, whereas when management simply collects a paycheck, then increasing salaries becomes a first priority.
Interpretation
What this quote means
Management's priorities shift based on their ownership in the company, affecting their decision-making.
This quote by Peter Lynch highlights the relationship between management's ownership stakes in a company and their priorities. When executives have a financial stake in the company through stock ownership, they are more likely to prioritize shareholder rewards and long-term growth. Conversely, if they are solely on a salary, their focus tends to shift towards increasing their own compensation rather than enhancing shareholder value.
Themes
ManagementShareholdersPrioritiesOwnershipCompensation
In practice
Example use cases
A CEO discussing the importance of aligning their interests with shareholders during an annual meeting.
More from Peter Lynch
All quotes βNever invest in any idea you can't illustrate with a crayon
Peter LynchRead
The basic story remains simple and never-ending. Stocks aren't lottery tickets. There's a company attached to every share.
Peter LynchRead
The junior high schools and high schools of America have forgotten to teach one of the most important courses of all. Investing.
Peter LynchRead
All the math you need in the stock market you get in the fourth grade.
Peter LynchRead
You can find good reasons to scuttle your equities in every morning paper and on every broadcast of the nightly news.
Peter LynchRead
Similar quotes
But lest some unlucky event should happen unfavorable to my reputation, I beg it may be remembered by every gentleman in the room that I this day declare with the utmost sincerity, I do not think myself equal to the command I am honored with.
George WashingtonRead
To grasp and hold a vision, that is the very essence of successful leadership-not only on the movie set where I learned it, but everywhere.
Ronald ReaganRead
You need people who can walk their companies into the future rather than back them into the future.
Warren BennisRead
I am sure that the mistakes of that time will not be repeated; we should probably make another set of mistakes.
Winston ChurchillRead
When you care about people's happiness and productivity, you give them what brings out the best in them and their creativity. And if you give them a choice, they'll say, 'I want an iPhone,' or 'I want a Mac.' We think we can win a lot of corporate decisions at that level.
Tim CookRead
The fact is, employees cannot make breakthroughs if they can't openly and honestly disagree with their peers and their leader. Indeed, great leaders don't just permit conflict; they actively try to elicit it from reluctant employees as well.
Patrick LencioniRead