Investing and career advice from Peter Lynch disciple William Danoff - Business Insider

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Peter Lynch disciple William Danoff runs a $120 billion fund for Fidelity. He reveals the 4 exact qualities that must be met before he buys something — and shares his keys to becoming a great investor.

But before these issues were welcomed into Danoff's portfolio, each security went through a rigorous vetting process. The four qualities he looks for are listed below, in bold.— that are extremely knowledgeable about their industry and enthusiastic about their company — and, in some cases, ideally, are founders of the company ... the company is an expression of who they are and what they are, and they really want to grow the company ... then that's the perfect situation," he said.

He added: "Especially if it's a good business and they have a differentiated product offering and a great value proposition." To further expound on his criteria, Danoff provided an example from the 1980's. At the time, he was a retail analyst covering Costco — a company that was just starting to catch the eye of investors.

"I remember the early days of companies like Costco," he said. "When you look back over a 20-year time horizon, you just see a pattern that you want to replicate going forward. And that would be: A special business that delights their customer, an owner-operator,is something that Danoff often emphasizes — and it's reflected in his portfolio. Currently, he has a massive, $4.4 billion position in Salesforce.com .

"I was a little late to the software as a service sector — and then I went to Dreamforce, which is Salesforce.com's user conference out in San Francisco," he said. "I was just blown away by the enthusiasm of the employees and the customers. And you know, that can be priceless in terms of your appreciation of the strength of a franchise." low capital intensive

 

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