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I very much enjoyed my Q&A session with the Class of 2019 Dakshana Scholars at JNV Silvassa (Union territory of Dadra & Nagar Haveli, India) on February 25, 2018. This all-female batch of Dakshana scholars will take their medical entrance exams in 2019. The majority are likely to be accepted by the best medical schools. Their questions covered a broad range of topics related to my childhood, compounding, lessons from my failures and motivation behind our establishing the Dakshana Foundation. Enjoy! https://www.youtube.com/watch?v=jjjI5O_uZUA 
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I very much enjoyed being interviewed by ET Now for a "Chai With Pabrai" segment. We discussed a wide range of topics including my views on stocks in India, circle of competence and Dhandho investing (low risk high uncertainty) in India. Enjoy! https://www.youtube.com/watch?v=T7Qr1Ze8vNA  I recently gave a talk to Prof.Bruce Greenwald’s "Legends of Value Investing" class at Columbia Business School entitled “Where have we been and where are we headed?” We discussed historical performance periods in the capital markets and lessons we can glean for our future. Enjoy! It is best to watch the video using the Firefox browser. It may take a few minutes to load. You may want to turn up the volume for better audio. You can toggle between the slides and the video by clicking on the box in the bottom right of your screen: https://echo360.org/media/80cb039a-ded1-4395-a673-6b548ab27ea4/public  I very much enjoyed being interviewed by ET Now at the Berkshire Hathaway Annual Meeting with Guy Spier and Raamdeo Agrawal. We discussed our experiences attending Berkshire meetings over the years (it was my 21st meeting!) and the lessons that are reinforced every year on our annual pilgrimage to Omaha. Enjoy! https://www.youtube.com/watch?v=7FspBQlgu88&app=desktop  I very much enjoyed my Q&A session with the class of 2019 Dakshana scholars at JNV Kottayam, Kerala, India on Dec. 24, 2017. These scholars will take the IIT entrance exams in 2019. The majority are likely to be accepted by the IITs. Their questions covered a broad range of topics related to compounding, as well as the reasons behind our establishing the Dakshana Foundation. Enjoy! https://www.youtube.com/watch?v=jqX9AgwgwTY&feature=youtu.be I suggest the following books to start one's journey into finance and investing: 1) 1958-1970 Buffett Partnership Letters (these are available at various places on the web, including http://pragcap.com/warren-buffett-partnership-letters). Cost: Zero 2) The Warren Buffett letters to Berkshire Hathaway Shareholder. These are posted at www.berkshirehathaway.com. Cost: Zero 3) 1995 published biography called “Buffett: The Making of an American Capitalist” by Roger Lowenstein. 4) 2009 published book “Snowball: Warren Buffett and the Business of Life” by Alice Schroeder. 5) “Poor Charlie’s Almanack” by Peter Kaufman. 6) “The Dhandho Investor” by Mohnish Pabrai. 7) Berkshire Hathaway Letters to Shareholders - 1965-2014 8) Berkshire Hathaway Letters to Shareholders - 1965-2017. Only available on Kindle but cost is just $2.99.  I enjoyed this video that summarized the Patels’ business practices from "The Dhandho Investor." The video explores how the Patels got into the motel business in the U.S, their low cost operating model and high return on equity. Heads I win, tails I don't lose much! https://www.youtube.com/watch?v=INSuLnQJvuY&feature=youtu.be&a Enjoy! 
In late December 2016, I co-wrote an article on Forbes.com that introduced the "Uber Cannibals," a five-stock investing strategy that invests in businesses aggressively buying back their own stock. This is a "set it and forget it for one year" strategy that rebalances every April when 5 companies are selected for the portfolio for the upcoming year.
The Uber Cannibals draft season is now upon us, and it's time to pick our 2018 - 2019 team. As a recap, in my 3/31/17 blog post, we met Ms. Sonia Patel, who had embarked on her Uber Cannibals investing journey with $100,000 from her IRA account at Interactive Brokers. Sonia invested in the first 5 Uber Cannibals on 1/3/17, and then rebalanced her portfolio in April 2017 with the 2017 - 2018 Uber Cannibals, which were:
As of 3/29/18, Sonia's $100k was worth $130,646 (after trading costs), up 30.6%. If Sonia had instead invested in the S&P 500 over that period, she would be up 20.9% and her portfolio would be worth approx. $10k less, or $120,907.
Lowe's and Hackett Group paid dividends totaling $744. Per our rules, Sonia reinvested those dividends back into the same businesses.
The Ubers are doing quite well! This strategy makes sense if you intend to follow it for at least a decade or two (or longer). So we shouldn't fixate too much on short term performance. But I am happy to see that Sonia is off to a great start. Keep at it Sonia! The New Uber Cannibals: For 2018 - 2019, our algorithms selected the following five Uber Cannibals:
Sleep Number Corp. (which recently changed its name from Select Comfort) will continue to be in the portfolio for another year. But we have four new kids on the block. If you invested in the Uber Cannibals in April 2017, then leave Sleep Number Corp untouched, and sell Lowe's, NVR, Hackett, and Willis Lease. Then invest the proceeds equally among the four new kids: Corning, PulteGroup, Discover Financial Services, and Lear. Below is the 1 year return of the 2017-2018 Uber Cannibals through 3/29/18:
If you invested in the Uber Cannibals in April 2017 in a taxable account, try to sell the winners (currently Lowe's, NVR and Willis Lease) after holding them for at least 366 days and the losers (Hackett) after no more than 364 days.
If you are a new investor to the Uber Cannibals, you can just equal weight the five stocks (i.e., invest the same amount of money in each of these five) and keep that portfolio until April 2019, when I'll provide the 2019 - 2020 portfolio on www.ChaiWithPabrai.com. Happy Cannibal Investing! Note, anyone who invests in any strategy needs to do their own research/due diligence and are themselves fully responsible for the outcome. 
“Compounding is the 8th Wonder of the World” – Lecture & Q&A at Peking University – Dec. 22, 20173/27/2018 I very much enjoyed visiting the campus of Peking University's Guanghua School of Management with Guy Spier and Monsoon Pabrai to give my second lecture entitled “Compounding is the 8th Wonder of the World.” The presentation was followed by a rich Q&A session on a diverse range of topics. The lecture covered my favorite subjects – compounding, Rule of 72 and Warren Buffett. Enjoy! https://www.youtube.com/watch?v=z74NaYRyMJo&t=6564s  I very much enjoyed my lecture and Q&A entitled “Compounding is the 8th Wonder of the World” with Dakshana Scholars at the Dakshana Valley Campus on Dec. 26, 2017. The questions covered a broad range of topics related to compounding, including philanthropy, patient investing and choosing equities over other asset classes. https://www.youtube.com/watch?v=VvpfjxLiO9g&feature=youtu.be Enjoy!  It was truly an honor to receive a shout-out by Charlie Munger during the Daily Journal Annual Meeting in Los Angeles on February 14, 2018. Charlie was discussing the fair investment management fee structure of the Buffett Partnerships of the 1950s, which I have enthusiastically cloned for 19 years. Here is a brief clip from the “Closing Bell” on CNBC that summarized the talk. Kelly Evans mentions Munger’s fee structure comments from 2:40 onwards: https://www.cnbc.com/video/2018/02/14/berkshires-charlie-munger-on-wells-fargos-mistake.html?play=1 Richard Lewis shared the full transcript of the 2018 Daily Journal Annual Meeting. You can find it here: http://latticeworkinvesting.com/2018/02/19/charlie-munger-full-transcript-of-daily-journal-annual-meeting-2018 Enjoy!  |
Mohnish PabraiMohnish Pabrai is the founder and Managing Partner of the Archives
June 2018
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