// STUDY RESULT · 1994-01 TO 2026-07
Lynch: GARP & Category Playbook
NO EDGEBuy what you can understand, classify it (slow grower, stalwart, fast grower, cyclical, turnaround, asset play), and pay a P/E no higher than the growth rate.
| THE STRATEGY | $SPX BUY & HOLD | |
|---|---|---|
| Growth a year (CAGR) | 6.6% | 8.9% |
| Return per unit of risk (Sharpe) | 0.38 | 0.65 |
| Worst fall (max drawdown) | -63.1% | -52.6% |
// GROWTH OF $1, LOG SCALE
AMBER: THE STRATEGY · GREY: $SPX BUY & HOLD
Tested on years it never saw (from the split): 13.6% a year against 12.4% for the benchmark; Sharpe 0.24 in the training years, 0.65 after.
After 25 bps of trading costs: 4.8% a year. WITHIN RANDOM
// DECADE BY DECADE
| ERA | STRATEGY | BENCHMARK |
|---|---|---|
| 1990s | 8.9% | 19.4% |
| 2000s | -3.0% | -2.6% |
| 2010s | 6.8% | 11.6% |
| 2020s | 20.2% | 14.1% |
// THE IDEA, AS PUBLISHED
Peter Lynch, 'One Up on Wall Street' (1989) · 1989
- PEG = P/E / growth rate: 1 is fair, 0.5 very attractive; or (growth + yield) / P/E of 2 or more
- Prefer dull, overlooked names with insider buying and little institutional ownership
- Set expectations by category; fast growers ideally 20-25% a year
A real computation on the QuantGPT warehouse, survivorship-free, walk-forward. Gross returns, no costs except where stated. Past performance is not a promise. Findings, not advice. COMPUTED 2026-09-24 19:42 ON THE QUANTGPT WAREHOUSE: EVERY DELISTED NAME KEPT, FUNDAMENTALS AS FILED. NOT INVESTMENT ADVICE.