Lessons Learned On The Links Investment guru Peter Lynch traces his success in finance to his caddying days

October 15, 2000

Peter Lynch, the stock-picking guru, is sitting in his cramped
office in downtown Boston, ignoring for the moment the
ham-and-tomato sandwich on his cluttered desk and the blinking
computer behind it. He closes his eyes and goes into a mental
drift, remembering his boyhood days as a caddie at Brae Burn
Country Club, in the heart of Boston's well-hedged suburbs. The
man is an investing legend, credited with growing the Fidelity
Magellan Fund 29.23% a year, on average, from mid-1977 to
mid-1990, when he stopped managing it. His memory for numbers,
particularly stock prices, is photographic. But at the moment he
is trying to recall what he earned in 1955 as an 11-year-old "C"
caddie at Brae Burn, and for this faded number his memory is

His eyes stay shut for 15 seconds or so. He seems to be a
self-absorbed man, but maybe that comes with his territory. He
doesn't say thank you to the woman who brings in his sandwich. He
doesn't offer a midday guest anything to eat or drink. He shakes
hands with four limp fingers. He goes off wildly, amusingly, on
conversational tangents. He's a self-made billionaire.

"My mother sewed padding in the shoulder of my shirts, and I got
maybe $2 a loop, with tip, that first summer, but that was
carrying a single," Lynch says. "By the time I was an 'A' caddie,
in high school, I was carrying two bags, doing two rounds, making
$10 a day. My friends who had newspaper routes couldn't make that
in a week."

His experiences at Brae Burn shaped his life. He attended Boston
College--where his father, who died the winter before Lynch became
a caddie, had been a math professor--on a Francis Ouimet Caddie
Scholarship. Tuition at BC in the mid-1960s was $1,000 a year.
The caddie scholarship paid $300 of that, and Lynch earned the
rest working at Brae Burn.

It was at Brae Burn that he learned about the stock market. Young
Lynch would hear the men at the club--lawyers and doctors and
businessmen--talk about their stock picks, and he was entranced.
He began charting stocks.

One of his regular loops was a man named D. George Sullivan, who
was the COO of Fidelity Investments. "Outstanding person, big
tipper, bad golfer," Lynch says. Lynch carried for him, and
others, for 10 years. In the fall of 1965, Lynch applied for a
position at Fidelity for the following summer. There were 75
applicants for three spots. Lynch secured one of them. Except for
a stint in the army, he's never worked anyplace else.

All his success, he says, is rooted in what he learned in golf.
As a teenager he was giving golf advice to men four times his
age, men who had fought in wars, made fortunes, been audited,
raised families, men accustomed to professional counselors.
Because the kid knew what he was talking about and wasn't afraid
to express his opinion, they listened to him on the most
sensitive subjects of all: How does this putt break? Can I clear
the water from here? In the 40 years since then, the only thing
that has changed for Lynch, whose title now is Vice Chairman of
Fidelity Management and Research, is what he is analyzing.

"Golf courses are dynamic places, and so are businesses, always
changing," says Lynch, a 16 handicapper who plays infrequently
these days, owing to a litany of old injuries. "On different days
you have different pin placements, different winds, different
weather conditions; the golfer is different from day to day; you
have these variables. You have to have concrete reasons to pick a
stock, just as you have to have concrete reasons to pick a club.
If a guy needs a three-iron to get over the water, but he can
only hit his three-iron well enough to get over one time in four,
it's not a good pick."

He learned disappointment as a caddie, too. In 1963 the U.S. Open
was played at The Country Club, in Brookline, three bowls of
chowder from Brae Burn. One hundred seventy-five local caddies
entered a lottery to get bags in the Open. All but about 25
landed jobs, Lynch not among them. "That was crushing," he says,
"but guess what? There are crushing things in life. I learned to
move on."

One of his investment adages is, "Know what you own and why you
own it." He doesn't invest in golf companies because he doesn't
follow them. He wishes he had bought Callaway stock when "you had
to wait in a line to buy the club." He would have sold "when I
saw the clubs being given away as raffle prizes." You have to
know what you own and why you own it.

In 1986, Lynch, as a visitor, and a friend won the three-day
member-guest tournament at Brae Burn. Lynch wasn't surprised at
the outcome. He knew why he won. He knows everything about Brae
Burn, all the good spots, all the bad ones, too. It's like he
owns the place.


Young Lynch would hear the men at the club talk about their
stock picks, and he was entranced.

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