In a recent interview with Yahoo Finance, Berkshire Hathaway CEO Warren Buffett explained why he is bullish on bank stocks:
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- “They’re businesses I understand, and I like the price at which they’re selling relative to their future prospects;”
- “I think ten years from now they’ll be worth more money and I feel there’s a very high probability that I’m right;”
- “I don’t think that it will turn out to be the best investment at all, of the whole panoply of things you could do, but I’m pretty sure that they won’t disappoint me.”
- “You have to know what you don’t know and make sure that wat you don’t know isn’t all important.”
Validea used the investment strategy outlined in the book One Up On Wall Street written by Peter Lynch to create our P/E/Growth Investor model. The strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets. Lynch guided Fidelity Investment’s Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500’s 15.8 percent yearly return over that time.
A Buffett-inspired Stock Model based on the book Buffettology
Validea’s model seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations. The target return on top rated stocks is 15% per year.
Learn More about Lynch’s GARP Model
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