Lynch & Buffett: A Dynamic Duo?

Legendary investors Peter Lynch and Warren Buffett have each posted exceptional returns on their own, so what would happen if they teamed up to pick stocks? In a “Number Cruncher” column for Canada’s Globe and Mail, John Heinzl uses Validea Canada’s guru-based screeners to try to answer that question.

In January, Globe and Mail put together a nine-stock portfolio of Canadian stocks that passed both Validea Canada’s Lynch- and Buffett-inspired strategies. And while it’s still early, the results have been very strong: “From the inception date on Jan. 18 through March 28, eight of the nine stocks rose, led by double-digit gains in Bird Construction and MTY Food Group,” Heinzl writes. “Over all, the portfolio posted an advance of 7.3 per cent, excluding dividends. That handily beat the advance of 0.7 per cent for the S&P/TSX composite index over the same period, also excluding dividends. So far, it looks as if our little experiment is working.”

Validea Canada tracks a 10-stock portfolio picked using the Lynch approach and another 10-stock portfolio picked using the Buffett approach. Since its Aug. 6, 2010 inception, the Buffett-inspired portfolio is up 16.9% vs. 4.6% for the S&P/TSX Composite, while the Lynch-based portfolio is up 11.8%.