In an interview with CNBC’s Squawk Box, legendary investor Peter Lynch, who grew Fidelity’s Magellan Fund from $20 million in 1977 to $14 billion in 1990, says that “the sucker’s going up” isn’t a good enough reason to buy a stock, and that people put more care into which refrigerator they purchase rather than what they invest in. Instead, investors need to examine the company, look at the balance sheet, and determine the reason why the stock should be higher.

Lynch’s philosophy has always been “buy what you know,” and while he still adheres to that, he told CNBC that it’s important to seek out different things that might not be on anyone else’s radar, like local or new companies, as well as businesses that are in a turnaround or ripe for growth. He pointed to Panera, Family Dollar Stores, and Stop & Shop as recent examples of companies with surprising growth.

When asked about the current situation in the banking sector, Lynch pointed out that in past banking crises, such as in 1999-2000 and 2008, banks and regulators were much less cautious. Since then, “the banking system has improved” and most banks now have “stress tests,” though it’s possible that some companies will go under because “that’s the nature of it,” he told CNBC, adding “there’s always something to worry about.” And while Lynch insisted that he can’t predict the future any better than anyone else, he said “if this is a recession” it is “the most predicted one ever.”