Financial Wizard Peter Lynch Took Stock of His Life and Walked Away from a Million-Dollar Job
It was a Saturday, and like just about every other Saturday for the past eight years, Peter Lynch was in his ninth-floor office in downtown Boston. As the brains behind the largest and most successful investment fund in the country, Lynch should have been concentrating on the stack of annual reports, prospectuses and balance sheets stacked high on his desk. Instead, this February weekend, his mind was 200 miles away, on the slopes of New Hampshire's Balsams ski resort, where his 7-year-old daughter, Beth, was entering the first downhill race of her life. "I wasn't there," Lynch says simply, "and it got to me."
That moment of parental angst was the last straw, prompting an announcement that stunned the financial community. Peter Lynch, at the unripe middle age of 46, was calling it quits. In two months he will clean out his desk and leave a job that pays him a salary estimated at anywhere from $3 million to $10 million a year. Surely, the '80s are over for good and all.
Over the past 13 years, Lynch has taken a once obscure mutual fund, the Boston-based Fidelity Magellan, with a modest $22.2 million in assets and some 10,000 shareholders, and transformed it into a $13 billion behemoth with roughly 1.1 million shareholder accounts. To a large extent, Lynch won his widely acknowledged reputation as the nation's star stock picker through nothing more glamorous than plain hard work. He routinely put in 80-hour weeks at the office, and he personally visited 40 or more companies every month. The homework and legwork have paid off handsomely. Every dollar put into the fund in 1977 is worth more than $25 today, or more than six times the climb of the Dow Jones industrial average over the period.
A self-professed workaholic, Lynch is unlikely to withdraw totally to devote himself to, say, endless rounds of golf. While he has had little time for the links in recent years, the 11-handicapper owes a considerable debt to the game. His father, a Boston College math professor and later an auditor at John Hancock, died of cancer when Peter was 10, and the boy soon turned to caddying to help his mother pay the bills. "I caddied because I could make more on a Saturday morning than I could in a week of delivering newspapers," he says. And he began to listen to those he caddied for—businessmen, doctors, lawyers—talking about the stock market. "Those years on the golf course," Lynch recalled in his best-selling 1989 book, One Upon Wall Street, "were a great education, the next best thing to being on the floor of the exchange."
Lynch even won a partial scholarship for caddies to attend BC, where he first broke par in the market by investing $1,250 in Flying Tigers at $7 a share. In two years the stock jumped to $32 2/4, then higher still. Lynch eventually sold it to help bankroll graduate studies at the University of Pennsylvania's Wharton School, where he worked so hard that he was known as the Mole. It was there that Lynch met his wife of 22 years, Carolyn, who says he talked nonstop about the stock market on their first date.
In 1966 Lynch vied with 100 other young applicants for a summer job at Fidelity, and he now admits that he had an unbeatable edge: He had—yes—caddied for years for the company president. Lynch had to put in a two-year Army stint in South Korea before he could go with Fidelity full-time as a metals analyst. "I was scared to death," he says of his early insecurity in the security business. He took over Magellan after eight years as director of research. "All I wanted to do," says Lynch, ever the golfer, "was keep going and not hit the ball out of bounds."
The fund flourished, and so did Lynch, who admits he and his wife now have "more money than we ever dreamed of." But Lynch also began to take stock of his life. While he isn't inclined to be morbid, he is feeling "a little more mortal. In 1989 I gave two eulogies. That's more than you want to give in your lifetime." He also became increasingly aware of the fact that his father had died at age 46.
Those 80-hour weeks also began to take their toll. "I used to be home Saturdays watching Sesame Street or Mr. Rogers," he says, "with my daughters" (Mary, now 15, Annie, 11, and Beth). Saturdays went first, and "in the last 18 months," laments Lynch, "I've been working Sunday mornings before church as well." An avid fan of BC's athletic teams, Lynch hasn't seen a hockey, football or basketball game in several years. In that time he has been to the opera only three times. "When I realized the score was opera 3, sports 0," says Lynch, "I knew something was wrong with my life."
Come May 31, Lynch will be spending a lot more time with his family at their waterfront home on Boston's North Shore. But as the kind of guy who can tell you where the Dow Jones industrial average stood on nearly every important date in his life—from when he got married to when he got his job at Fidelity—he is hardly hanging up his financial spikes.
A board member of such disparate institutions as Boston College, the Massachusetts Eye and Ear Infirmary and the Museum of Fine Arts, Lynch plans to lend his expertise to those organizations. "In addition," he says, "my wife and I have started a charitable foundation specifically for religious, health care and educational organizations. I'll still be managing money, but now I can work 70 hours one week and four the next if I want. I can watch my kids in sports. I own a sailboat—a 19-foot sloop—with a friend, and maybe now I'll finally learn to sail. I can go skiing with my family, and I can play golf." And, best of all, he concludes, "I can take real vacations without having to leave phone numbers."
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