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Here Come the Uber Cannibals!

12/22/2016

17 Comments

 
I co-wrote an article in Forbes on an investment strategy called "The Uber Cannibals."

Uber Cannibals are  companies that aggressively buy back their own stock. I will publish the list of the top Uber Cannibals for a particular year on my blog on March 18 each year.

If you choose to pursue the strategy of investing in Uber Cannibals, you can either start with these 2016 Uber Cannibals now and then rebalance at March 20, 2017, or wait until March 20, 2017 to start investing in the new list of 2017 Uber Cannibals then.  

The Uber Cannibals for 2016 are:
  1. AutoZone (AZO) 
  2. Magellan Health (MGLN) 
  3. Marriott International (MAR) 
  4. NVR (NVR)
  5. Lowe’s (LOW)

This is a "set it and forget it" strategy. I'd suggest not putting more than 10% to 20% of your nest egg in this strategy. It only makes sense if you intend to follow it for at least a decade or two or longer. The ideal straetgy is in your IRA. That way, there are no realized gains to worry about. 

You can view the article here: 

http://www.forbes.com/sites/janetnovack/2016/12/22/move-over-small-dogs-of-the-dow-here-come-the-uber-cannibals/#2c38ff233dea 

I co-wrote the article with Yingzhuo Zhao, a talented quant at ​Dhandho Funds. 

Enjoy!

Note, anyone who invests in any strategy needs to do their own research/due diligence and are themselves fully responsible for the outcome. 
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17 Comments
Brad kell
12/22/2016 03:33:21 pm

Great blog.... I read your insights with great interest . How can I subscribe to your blog or website?thank you, Brad

Reply
Mohnish Pabrai
12/23/2016 03:23:59 am

Just drop me a note at mp@dhandhofunds.com and I will get you subscribed to the blog.

Reply
Anjani
9/19/2018 10:34:02 pm

I would like to subscribe to your blog as well.

Eswaran link
12/23/2016 12:02:55 am

Thanks again for your highly valued contribution Mohnish. With this particular strategy, do you suggest selling the old and buying the new every year?

Reply
Mohnish Pabrai
12/23/2016 03:22:25 am

Exactly. I will publish new constituents every year around March 20. If this is in a taxable acct. sell the winners after 366+ days and the losers at 364- days. Auto-pilot.

Reply
Eswaran link
12/23/2016 05:36:06 am

Thank you Mohnish. Your generosity with your time and knowledge is exemplary.

Ashraf
3/1/2017 06:34:34 pm

how can i screen and or find companies who repurchase stocks?

Reply
Mohnish Pabrai
3/10/2017 05:20:41 pm

THE ONLINE INVESTOR lists out stock buyback announcements on their website for free. There is a Barron’s article which lists out where you can track buybacks. http://www.barrons.com/articles/SB50001424053111903548904576343230992646092

Reply
Dustin Johnson
3/7/2017 04:54:50 am

Hi Monish, this article is really great. Thanks for sharing! One question - what dataset are you using for this. I have been trying to do some of my own backtesting for strategies like this using Bloomberg and I am unable to get the same results. Thanks!

Dustin

Reply
Mohnish Pabrai
3/10/2017 05:21:56 pm

We were using point-in-time data primarily from S&P Capital IQ for our backtesting.

Reply
Dustin Johnson
3/20/2017 11:32:40 am

Thanks again!

Reply
Fallon
3/20/2017 07:38:14 am

Hi Mohnish,

Are you still publishing the updated Uber Cannibals list on your blog? I looked on the 18th, but I wasn't able to find it.

Thanks for sharing your amazing work and insights here.

Best,

Fallon

Reply
Mohnish Pabrai
3/20/2017 05:05:48 pm

Hi Fallon. Thanks for the nice note. I have changed the timeframe slightly in order to include the most updated company data. I will be recommending the Uber Cannibals portfolio tweaks in the first week of April going forward. Please stay invested in the current portfolio until then.

Reply
vishal
3/20/2017 08:37:57 pm

Great blog and useful insights.. When can we expect the uber cannibals list for 2017 ? Thanks.

Reply
Chris P link
3/23/2017 09:03:00 am

> ... or wait until March 20, 2017 to start investing in the new list of 2017 Uber Cannibals then.

Hello. I'm looking forward to the next publishing of the Uber Cannibals. Do you have a timeline for that event?

Thanks

Reply
Mohnish Pabrai
3/29/2017 12:23:19 pm

@Vishal @Chris I will update the Uber Cannibals portfolio in the first week of April. Please stay invested in the current portfolio until then.

Reply
Manish Shah
7/22/2017 10:38:57 pm

Hello Mohnish,

I wish to replicate this for Indian Stock Market. It will be great if you can provide me some pointers on this.

Thanks

Reply



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    Mohnish Pabrai

    Mohnish Pabrai is the founder and Managing Partner of the
    Pabrai Investments Funds, the founder and CEO of
    Dhandho Funds, and the author of The Dhandho Investor and Mosaic. 

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