Peter Lynch's "Local Knowledge":

Peter Lynch is a Wall Street Investor. He was working with Fidelity Investments as Fund Manager. He is a value investor, just like Warren Buffet. His book "One up on Wall Street" is a classic that every investor should read. He is currently a research consultant at Fidelity Invesmtents.

His most famous investment principle is simply, "Invest in what you know," popularizing the economic concept of "local knowledge". This simple principle resonates well with average non-professional investors who don't have time to learn complicated quantitative stock measures or read lengthy financial reports. Since most people tend to become expert in certain fields, applying this basic "invest in what you know" principle helps individual investors find good undervalued stocks.

No doubt. Investments are best understood when we correlate with our own experience. Many objects / items / situations we come across in day to day life would make us admire the producer of such products. Be it a Hotel or Tooth paste or hospital or bank. The prosperity of such products would make neighbours envy. Often we fix our mind to such single product, whereas these companies could be in more diverse businesses. If and only if we could take the next step – often a bold step – to dig deeper, understand their entire business model, their financials – we could make an investment in such companies and grow along with them.