# GARP - Growth at Reasonable Price (Peter Lynch)
**Moeilijkheid:** intermediate · **Timeframe:** 3-7 years · **Asset:** stocks
**Strategie van:** Peter Lynch
**Risk/Reward:** Moderate risk, high reward potential

## Samenvatting
Vind snelgroeiende bedrijven tegen redelijke waarderingen met Lynch's PEG-ratio (K/W gedeeld door groeisnelheid).

Peter Lynch's GARP-strategie zoekt het ideale punt tussen groei- en waardebeleggen. De sleutelmetric is de PEG-ratio: K/W-ratio gedeeld door winstgroeisnelheid. Een PEG < 1,0 geeft aan dat het aandeel ondergewaardeerd is ten opzichte van zijn groei. Lynch vond 10-baggers (aandelen die 10x opbrachten) door groeiende bedrijven te identificeren voordat Wall Street ze ontdekte.

## Kernprincipes
- Target PEG ratio < 1.0 (lower is better)
- Prefer earnings growth of 15-25% annually
- Avoid overpaying even for great growth
- Look for underappreciated companies in boring industries

## Instap-regels
- PEG ratio < 1.0
- Earnings growth 15-25% annually
- P/E ratio reasonable for the growth rate
- Strong fundamentals and competitive position

## Uitstap-regels
- PEG ratio > 2.0 (overvalued)
- Growth slows below 10% annually
- Story changes (competitive threats)

## Risico's
- Diversify across 10-15 GARP stocks
- Monitor earnings reports quarterly
- Sell partial positions as valuation expands

## The PEG Ratio: Growth Investing's Most Powerful Tool
Peter Lynch revolutionized growth investing with one simple formula: the PEG ratio. Take a stock's P/E ratio and divide it by its earnings growth rate. A stock with a P/E of 20 and 20% growth has a PEG of 1.0. A P/E of 20 with 40% growth has a PEG of 0.5—now that's interesting.

The beauty of PEG is that it levels the playing field between growth and value stocks. A 'cheap' stock with P/E of 8 might actually be expensive if it's only growing at 4% (PEG = 2.0). Meanwhile, a 'pricey' stock with P/E of 30 could be a bargain if it's growing at 45% (PEG = 0.67).

Lynch considered a PEG below 1.0 as potentially undervalued and above 2.0 as overvalued. The sweet spot? Companies growing earnings 15-25% annually with P/E ratios of 10-20, creating PEG ratios between 0.5 and 1.0. These were the hunting grounds where Lynch found his legendary 10-baggers.

## The Ten-Bagger Concept: How Lynch Made Investors Rich
Peter Lynch coined the term 'ten-bagger'—a stock that returns 10 times your money. During his 13-year tenure at Fidelity's Magellan Fund, he found dozens of them. His secret? Looking for growth in places Wall Street ignored.

Dunkin' Donuts was a classic Lynch ten-bagger. While analysts chased tech stocks, Lynch noticed the coffee shop chain expanding across New England with consistent same-store sales growth. It was boring, understandable, and trading at a reasonable PEG. The stock went up 20-fold.

The key insight: ten-baggers usually start as small, overlooked companies in mundane industries. By the time Wall Street analysts cover a stock, much of the easy gains are gone. Lynch advocated for individual investors to use their 'edge'—noticing which stores are always crowded, which products your friends love, which services are expanding in your neighborhood—before the professionals catch on.

## The Danger Zone: When Growth Becomes a Trap
For every ten-bagger, there are dozens of growth traps—companies where investors overpaid for growth that never materialized. Lynch warned repeatedly about the 'whisper stocks' with exciting stories but PEG ratios of 3.0, 4.0, or higher.

Consider a company trading at P/E of 60 with 20% expected growth (PEG = 3.0). For this investment to merely match the market over 5 years, the company must grow earnings 20% annually AND maintain that elevated P/E ratio. If growth slows to 15%, or the P/E compresses to 25 (still generous), the stock could fall 50% even as earnings rise.

Lynch called this 'paying for perfection.' When you buy at high PEG ratios, everything must go right. When you buy at low PEG ratios, you have margin for error. One disappointment, and high-PEG stocks crater while low-PEG stocks often barely notice.

## Magellan Fund: The Greatest Track Record in History
From 1977 to 1990, Peter Lynch transformed Fidelity Magellan from an $18 million fund into a $14 billion juggernaut, delivering 29.2% annual returns—nearly doubling the S&P 500's performance. A $10,000 investment when Lynch started became $280,000 when he retired.

Lynch's GARP approach meant he owned both 'growth' and 'value' stocks—he rejected the artificial distinction. He held beaten-down Chrysler (classic value) alongside fast-growing Taco Bell (classic growth). What united them was reasonable price relative to their earning power.

Perhaps most remarkably, Lynch did this without computer screens or algorithmic trading. His research was fundamentally simple: visit stores, read annual reports, calculate PEG ratios, and buy what he understood at prices that made sense. He proved that individual investors could beat Wall Street using discipline and common sense.

Bron: https://daytraders.nl/strategies/garp-growth-at-reasonable-price-peter-lynch