Buy when others are fearful, Warren Buffett says, and lately, there’s been a lot of fear in markets, thanks to the resurgence of the European debt crisis. So in his Number Cruncher column, Globe and Mail’s John Heinzl takes a look at some Buffett-like bargains using Validea CEO John Reese’s Buffett-inspired Guru Strategy.
“Mr. Buffett aims to buy solid businesses at ‘fair’ prices and often holds stocks for decades, Coca-Cola and American Express being two examples,” Heinzl writes. “He summed up his investing philosophy in his 1996 letter to Berkshire [Hathaway] shareholders: ‘Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, 10 and 20 years from now. Over time, you will find only a few companies that meet these standards — so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.’”
Heinzl looks at the 11 Canadian stocks that Reese’s Buffett-based model is highest on right now. Among them: Saputo Inc. and Bank of Nova Scotia.