When you're the daughter of investment guru Peter Lynch, it's kind of hard not to pick up great financial advice from dear old dad, even when he's not going out of his way to give it to you. That was the case for Annie Lukowski, one of three daughters of the famed Fidelity Investments Magellan fund manager.
Annual reports could frequently be found laying around their Massachusetts home. Simple shopping excursions to even the local drugstore could elicit a lines of subtle, yet inquisitive, questioning from her father, who used his offspring to conduct informal market testing, recalls Lukowski, 33, now a Los Angeles-based Web film director.
And although he didn't resort to Powerpoint stock chart presentations at the dinner table, Lynch covered the basics and beyond with his daughters.
"My father is known for having no computer skills, so there were never any Powerpoint presentations going on," Lukowski laughed. "But as a kid, he invited me in and said, 'This is what a P/E ratio is and this is what it does.' He was always saying it was important to remember that the stock market is a market of stocks ... [and he encouraged us] to follow these companies."
That advice should ring true to the value investors who follow Lynch, a man who believes in investing in companies that he intimately knows rather than making picks based on the gyrations of the stock market.
As a 4-year-old, Lukowski found herself in relatively rare position as an investor. Lynch put his middle daughter into an investment account shortly after the birth of her younger sister, she says.
"I wasn't doing much investing at age 4. He was mostly doing that," Lukowski says, noting that her father continues to manage that account. "I'm very fortunate to have a very smart financial adviser."
Lynch, however, solicits input from his daughters on stocks they might want in their portfolios -- adding their opinions into the mix.
In high school, Lukowski was a member of her school's stock market club, which entered a stock picking contest: Student teams were each given same amount of imaginary money and competed to make the most lucrative investments in their fake portfolios.
"I took that as a launching point," Lukowski recalls. "I'm was really excited about this one company and I think it's interesting. It was Panera Bread. And I really want to invest in it, so I did all the research for my club. And then we invested like $200,000 fake dollars, or something into it, through my club. And then I mentioned it to my father and he said, you know Annie, let's do it for real too. We got a position in that and went from there."
The investment in Panera Bread (PNRA) did extremely well, Lukowski recalls. Investors who purchased the stock 10 years ago and held onto it have seen its price soar approximately 600%. By comparison, the Nasdaq and the Dow are up roughly 50% over that same period.
"I loved Panera bread and I thought it was a great restaurant. They had WiFi before other restaurants and their menu was really exciting," Lukowski recalled.
As an adult, Lynch's middle daughter says she's strapped for time to do the investment research her father suggests is needed.
"My father always says it takes one or two stocks every decade to make a hit. If you have a full-time job and you're following 30 or 40 companies, you're not doing the proper research," says Lukowski, who admires his diligence and "amazing work ethic."
She noted, however, that her father isn't infallible: There have been some fish he's let get away -- Apple (AAPL), for example. When the iPod launched in 2001, Lukowski, then in her early 20s, was among the first to snap one up.
"I was the right age and loved music. My father was 'wow, this is a really interesting product,'" recalled Lukowski. But, apparently, it wasn't interesting enough. "He was late to the game, while I was really big on this iPod. He was like, 'oh, it's a piece of technology,' so he waited on that one."
Overall, Lukowski says, her investment style is like her father's: She's a value investor who believes a company is only worth investing in if she has personal knowledge about the product or interaction with it. It's a philosophy that dovetails with what Lukowski says is the best advice her father has ever given her.
"His best investment advice is also great advice for your life," says Lukowski. "It's do your research, know what you own, interact with it and then make a decision. It's very, very basic and very true."
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