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April 15, 1999

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Subject: Peter Lynch on Verbal Combat
Author: sharoncrayne

For those of us who have been involved in the stock market for more than the last two or three years, it is safe to say we all stand in total (and I do mean "total") awe of someone like Peter Lynch. A true genius -- at selecting winners, at creating a winning "system" at Fidelity of how to go about it. So, when I went back and read his words on verbal combat, I have taken them to heart. They are very sobering.

He said (talking about the formulized swapping of information amongst fund managers at Fidelity, where the managers, not the analysts, did the research):

"I have been troubled by the fact that some very creative minds come onto this board, and then fade away, seldom if ever heard of again."

..."These sessions of ours were not put-down contests. Wall Street tends to be a combative environment where only the glibbest survive, but combat is not the best way to arrive at the truth about stocks. When you are openly criticized for your ideas, you may tend to hold back the next time. And when there's a chorus of criticism, you're likely to lose faith in your own research" (read by Sharon, stop contributing openly ...). A hostile reception might not affect your confidence immediately, but the brain never forgets a painful experience...Often, the most valuable leads (read by Sharon, ideas) come from people whose stockpicking skills far exceed their forensic skills, and I have made it a point to pick the brains of the nonverbal...."

As one of the worst offenders, and I realize I am very combative, I found his words somewhat chilling. I have been troubled by the fact that some very creative minds come onto this board, and then fade away, seldom if ever heard of again. I can think of two or three who were greeted rather harshly.

The indidividual who was doing the "genetic" modeling was to me a very troublesome loss. Another person recently came on with a very thorough presentation, only to leave at the four letter word level when he got hooted at. Jeff Greenberg, back when, was another who came on with a somewhat different idea about picking DOW stocks and got rousted. None of these individuals were blameless, but to me, their disappearance and the disappearance of others like them was nevertheless a loss.

"We, on this board (in contrast to many others) at least, are rather obviously, stronger collectively than singly, regardless of our distinct and real differences..."

Some others, who have not left, seem to contribute only rarely now, yet their contributions in the past were pretty impressive. Have they stayed away because of the din?

We, on this board (in contrast to many others) at least, are rather obviously, stronger collectively than singly, regardless of our distinct and real differences in capabilities, experiences, and personalities. I for one will heed Lynch's words (and I do mean it). I hope all of us will do so in the spirit of thinking of ourselves as a collective "fund" willing to listen to new ideas from anyone, and not as competitors, and encouraging the swapping of ideas.

Remember, Buffet would only contribute once a year. It would prove a shame if his thoughts were dismissed because his ideas were different, or because he was not a regular.

And thanks to Sux who brought this issue to my attention. It is never to late to change when change is appropriate.

Sharon