Warren Buffett once called Peter Lynch to ask if he could use 1 specific line from his bestselling book in Berkshire’s year-end report. Here’s the line — and how it can make you rich

As the story of the legendary exchange goes, Buffett told Lynch that he’d read his recently published book, “One Up on Wall Street,” and wanted to use a particular quote in his year-end report, which was due in two weeks.

Lynch was on board, but he was curious so he asked Buffett which line he liked.

Without hesitation, Buffett offered up choice: “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.”

The quote in question did end up making it into the shareholders letter, along with an addition from Buffett: “We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint.”

Let your winners run

This exchange may have happened 35 years ago, but the investment philosophy it’s based on remains just as relevant today: let your winners run and cut your losers.

If you ask Lynch, one of the biggest missteps is selling off a promising company, only to watch as it “doubles, it triples, it quadruples,” he said during a CNBC interview in 2002.

When the host Louis Rukeyser asked him when an investor should sell, Lynch replied, “You ought to find out why you bought the stock.”

In essence, he stressed the importance of revisiting the initial reasons for investing in a company and staying attuned to its narrative. Lynch illustrated this concept using the example of Walmart.

“Ten years after [Walmart] went public, you could have bought the stock and made 500 times your money,” he remarked. “So you have to say to yourself: ‘In this stock, I have a 10-year story? A 20-year story?’ I’ll be able to write that down and follow that. That’s what I do.”