Although the going is harder than it was, [Peter Lynch] still emphasizes he is buying stocks every day. While edgy, Lynch is adding to stocks where the earnings are "predictable," such as finance companies Kemper, Beneficial, Primerica and American Express. He's building core holdings in the drugs, such as SmithKline Beecham.

Large holdings in Philip Morris (2.2 percent) and General Electric (1.3 percent) are untouched. Relatively new or enlarged stock holdings are Nestle (1.3 percent) and Unilever (1.1 percent), reflecting Lynch's recognition these international food and consumer-product giants have been lagging the market.

Just during the past five years Lynch's Magellan has risen 207 percent -- a triple if you happened to be along for the ride. This happens to be sensationally better than the Standard & Poor's 500 stock index, which rose by only 152 percent, including dividends. And it's almost double the performance of the average mutual fund, which only increased by 114 percent since 1984.