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I co-wrote an article in Forbes on a 5-stock investment strategy focused on spin-offs, or companies that have recently spun off from their parents. The Spinoff Portfolio is a “set it and forget it for a year” strategy that selects five young spinoffs on January 1st of each year. The full strategy rules are laid out at the end of the Forbes article. For 2018, our algorithm has selected these 5 spinoffs:
Investing in The Spinoff Portfolio is simple. Just buy the 2018 constituents in early January, putting 20% of the pie in each of the five names. I’d suggest not putting more than 10%-20% of your net worth in this strategy. Like the Uber Cannibals and Shameless Cloning Portfolio, we set it and forget it (for a year). I will publish The Spinoff Portfolio for a particular year on my blog by January 1st each year. This strategy only makes sense if you intend to follow it for at least a decade or longer. The ideal home for this strategy is your IRA. That way, there are no realized gains to worry about. You can view the article here: https://www.forbes.com/sites/janetnovack/2017/11/21/spin-gold-from-spinoffs-a-portfolio-of-5-castoffs-trounces-the-sp-500/#25e3db5b3e44 I co-wrote the article with Jaya Bharath Velicherla, 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. 
15 Comments
Mohnish Pabrai
11/27/2017 07:07:41 pm
Thanks for your note. You do not have to wait until January 2, 2018 to start implementing the strategy and you can buy the 5 Spinoff stocks for 2018 now. It is hard to predict whether buying now or waiting until 1/2/18 will help or hurt, but if you want to start and are ready, you can go ahead. However, it is important to subsequently hold the 2018 stocks until January 2019.
sunil
11/24/2017 02:02:46 am
How s&p500
sunil
11/24/2017 02:07:54 am
Sorry to interrupt. How S&P 500 investment turned 2.468 times in 18 years from 2000? This is about 5.15% return, I guess. For that to happen, S&P should be at 1000 in 2000, which it was not, unless I am missing something.
sunil
11/24/2017 02:27:56 am
You are right. You must have checked dividends reinvested. Thanks.
Praveen
5/5/2018 02:22:03 pm
Is it late to invest in this strategy or any other strategy you suggested like Uber Cannibals. 3/26/2020 06:12:53 am
Great news In some cases, the text will be hidden or slightly different. you always try and twist it. As above. You prove the search console is so great... 4/29/2021 09:51:08 am
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Thank you for sharing this awesome article that can be helpful on understanding how investing in the spinoff portfolio works. 9/2/2022 01:21:15 pm
This strategy only makes sense if you intend to follow it for at least a decade or longer. The ideal home for this strategy is your IRA. That way, there are no realized gains to worry about. I’m so thankful for your helpful post! 10/19/2022 03:20:56 pm
This strategy only makes sense if you intend to follow it for at least a decade or longer. The ideal home for this strategy is your IRA. Thank you for sharing your great post! Leave a Reply. |
Mohnish PabraiMohnish Pabrai is the founder and Managing Partner of the Archives
September 2023
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