Having learned a lot about Warren Buffett's investment advice, that's great, but do you know Peter Lynch? He also has many things worth our reference.

In the 1980s, one of the most famous and successful mutual funds in the United States was the Fidelity Magellan fund (NASD) AQMUTFUND:FMAGX. Its helmsman was Peter Lynch, who is one of the best investors of all time. How good is Mr. Lynch? From 1977 to 1990, the net asset value of the Magellan Fund grew at an average annual rate of 29%, almost double the growth rate of the S&P 500 Index Fund.

It is difficult for any investor to achieve a 29% return in a year, and it is almost impossible to average this over many years. Fortunately, Lynch did not hide his investment ideas. He has written several well-received books that many consider classics: "One Up On Wall Street," "Beating the Street," and "Learn to Earn" (the last one co-authored with John Rothchild). If you read one or more of these books, you are likely to become a smarter and more astute investor, but you can start with Lynch's nine lessons, as follows:

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First: "In the stock market, the most important organ is the stomach. It's not the brain."

Those who do not expect volatility and cannot cope with it should go elsewhere to accumulate wealth—although there are few places that can accumulate wealth as effectively over the long term as stocks. Lynch adds: "You must say to yourself every day: What would I do if the market fell 10%? What would I do if it fell 20%? Should I sell? Should I get out? If this is your answer, you should consider reducing your stock holdings today."

Emotion can be a real performance killer. If a market downturn causes you to sell in panic or a market boom causes you to greedily buy overvalued stocks, the best investors do the opposite. As Warren Buffett quips, it is best to be greedy when others are afraid and afraid when others are greedy.

Second: "Buy what you understand."

It is equally important to invest only in the stocks of companies you understand—some companies are easier to understand than others. For example, simply knowing that a company produces anti-cancer drugs is not enough. You need to know which drugs the company has in the market, how they are selling, which drugs are in production, and how close they are to the market (noting that many drugs never make it through clinical trials to be marketed). You also need to understand the drugs of competitors in the market and in the pipeline.

Companies that produce and sell soda, candy, or shoes are simpler. The goal is to be very familiar with the companies and industries you invest in. Lynch explains, "If you are prepared to invest in a company, then you should be able to explain why in simple language that a fifth-grader can understand, and do it quickly enough so that the fifth-grader does not get bored."

Third: "Don't be intimidated."

(The rest of the text is not provided, so the translation ends here.)It's easy to let stock investing intimidate you—after all, it involves some math. But most of the math isn't complicated. For instance, the price-to-earnings ratio (P/E) is just a ratio—the current price of a stock divided by its annual earnings per share (EPS). The dividend yield is the stock's annual dividend (usually the sum paid out over four quarters) divided by the current stock price. As Lynch points out, "Everyone has the wisdom to follow the stock market. If you passed fifth-grade math, you can do it."

Fourth: "Do your research" ("You need to investigate")

Many people buy stocks after reading just a little about them in articles, or worse, hearing a bit of news from friends or acquaintances. To achieve the best performance, you need to carefully study a company's financial statements to see how much cash and debt it has, how high its profit margins are, whether its revenue and earnings are growing, and by how much, among other similar figures.

Ideally, gather many promising company ideas and research them to see which ones still hold promise for you. Peter Lynch said, "The person who turns over the most rocks wins the race." He also said, "Never invest in any company before you've prepared by looking at its profit prospects, financial condition, competitive position, expansion plans, and so on."

Fifth: "Understand that there are grey areas" ("Understand that gray areas exist")

Lynch once said, "Investing in stocks is an art, not a science, and people who have been trained to quantify everything strictly have a big disadvantage." This is important because investing is not just about numbers and math. Take the typical disaster story of Long-Term Capital Management, a hedge fund managed by several Nobel laureates, which went bankrupt in 1998 and had to be bailed out with billions of dollars.

Investing in individual stocks requires making educated guesses about a company's performance; when several smart and talented people study the same company, they may reasonably come to different estimates and opinions. The automotive company Tesla is a great example, as it has enthusiastic supporters and critics.

Sixth: "Look behind the obvious" ("Look at what's hidden behind")

Another golden point from Peter Lynch is: "During the gold rush, most prospective miners lost money, but those who sold them picks, shovels, tents, and jeans (Levi Strauss) made a lot of money. Today, you can look for non-internet companies that indirectly benefit from internet traffic (package delivery is an obvious example); or, you can invest in manufacturers of switches and related equipment to keep the traffic flowing."

It's easy to see obvious promising stock ideas, but many others have already noticed, thus driving up the stock prices. However, many times, there are also many other companies working behind the scenes, supporting these companies. For example, Apple has achieved tremendous success, but it did not succeed alone; it has many hardware component suppliers, such as Universal Display. If you are bullish on e-commerce, you can look at companies that do a lot of deliveries, like FedEx and UPS, as well as various retailers. For the restaurant industry, you can look at equipment manufacturers like Middleby.Seventh: "Consider mutual funds"

All of this may make you realize that researching companies is not something you can do, whether now or in the future. You may not have the time, interest, or skills to do so, and perhaps not even the inclination to learn at this point.

That's okay, because there is a reliable alternative: mutual funds. Remember, after all, Magellan is a mutual fund with an annual return rate as high as 29%. Nonetheless, please keep in mind that such an astonishing record is extremely rare and impossible to find before it happens. For most of us, it is best to opt for low-fee, broad-market index funds, such as those based on the S&P 500 index. Over the long term, they have actually outperformed most other equity mutual funds. As Peter Lynch pointed out, "Stock (equity) mutual funds are the perfect solution for those who want to own stocks without doing their own research."

Eighth: "Expect losses"

It is equally important to anticipate losses when investing. Regardless of how good or bad an investor you are, or whether you invest in individual stocks, managed stock mutual funds, or index funds, they will happen. Even Warren Buffett has made some regrettable moves, as Peter Lynch said: "In this business, if you do well, you are right nine times out of ten. You will never be right nine times out of ten."

Ninth: "Be patient"

Lastly, be patient, because most of the substantial wealth in the stock market has been accumulated over decades—created by the rich and famous like Buffett and Peter Lynch, as well as ordinary people who have become wealthy through investment. As Peter Lynch said: "When you own shares of excellent companies, time is on your side."

We should consider reading at least one book on investing by Peter Lynch. His works are very accessible to most readers, and his lessons can help you make a lot of money.