I have been made aware that scammers and fraudsters are using my name, picture and doctored videos to target people online with fraudulent attempts to send money to be invested in non-existent investment schemes or for compensation for investment tips. The examples I’ve seen so far have been in perpetrated in India, but they may be elsewhere too. These are totally fake. Please read below to protect yourself:
I enjoyed my session with Dakshana scholars at JNV Bangalore (Rural). I talked about the power of compounding, how we overcame challenges at the Dakshana Foundation and about cloning as a powerful mental model.
Enjoy!
www.youtube.com/watch?v=D1n2qgcQoI4
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
In late December 2016, I co-wrote an article on Forbes.com that introduced the "Uber Cannibals," a 5-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 is also part of the broader 15-stock Free Lunch Portfolio, which also invests in Shamelessly Cloned ideas and Spawners that are updated annually in December.
These portfolios were an opportunity to shine light on concentrated strategies in high quality corners of the market. It has been over 7 years since we started presenting our picks. The performance of the portfolios since inception is presented below.
This post will be the final update in this series. My team will no longer be updating the Free Lunch Portfolio and highlighting new businesses. Our efforts have shifted solely to our day job of managing our funds.
Recap of 2023 Uber Cannibals:
As a recap, in my 3/31/17 blog post, we met Ms. Sonia Patel, who had embarked on her Uber Cannibals compounding 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 every year in April. The 2023 Uber Cannibals were:
As of 3/31/24, Sonia's $100k was worth $266,463 up 14.5% annualized since inception. If Sonia had instead invested in the S&P 500 over that period, she would be up 14.5% annualized and her portfolio would be worth $266,860. Uber Cannibals was up 56.0% in the last 12 months, vs. 29.9% for the S&P 500. Uber Cannibals has outperformed the S&P 500 for the last 12 months, despite no exposure to high-flying tech names. The Uber Cannibals 5-stock portfolio is far more concentrated than the indices and will be more volatile.
All five Uber Cannibals paid dividends. As per our rules, Sonia reinvested those dividends back into the same businesses.
Please note, the Uber Cannibals performance assumes that stocks are bought at the high price of the day and sold at low price of the day, whereas S&P 500 and Small Dogs of the Dow performance assumes that stocks are bought at last close.
The New 2024 Uber Cannibals:
Here are the 2024 Uber Cannibals:
Sell Assured Guaranty and Jack in the Box and invest the proceeds equally in AMR and AutoNation. The swaps are no-brainers at present prices (the threshold we need to meet to make a change to the portfolio). AMR and AutoNation operate in out-of-favor industries and generate a significant amount of free cash flow.
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).
As a reminder, in December 2023, we added AMR to the Free Lunch portfolio as a Shamelessly Cloned idea. As of 3/31/24, the weight of AMR in the free lunch portfolio is 3.3% if you had been investing in the free lunch portfolio since 2018 and 6.3% if you started investing in the free lunch in 2024. Considering these low weights for AMR, we don’t see any concentration issues adding it as a cannibal as well.
Free Lunch Portfolio:
We published the 2024 Free Lunch Portfolio in December 2023. The Free Lunch portfolio was up 13.7% in Q1 2024, vs. 10.6% for the S&P 500. The portfolio managed to outperform the high-flying S&P 500 in 2024. Since inception on January 1, 2018, on an annualized basis, the Free Lunch portfolio is up 7.8% while the S&P is up 13.4%. The S&P 500 has trounced the Free Lunch portfolio so far. In 2021 we decided to ignore the algorithm’s buy and sell decisions and only make portfolio tweaks if they are no-brainers. Since 2021, the Free Lunch portfolio is up 21.2% versus 14.3% for the S&P 500.
Note, anyone who invests in any strategy needs to do their own research/due diligence and are themselves fully responsible for the outcome.
I very much enjoyed my session with the students of CSIMA at Columbia Business School. I talked about Berkshire Hathaway's investment decisions, auto-dealership businesses and scope of EV's and coal business.
Enjoy!
www.youtube.com/watch?v=ZrJA8q5Yixg
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
I enjoyed my session with Divya Narendra at SumZero's Virtual Investor Summit 2024. I talked about the growth of EV's and real estate businesses in the U.S., and shared perspective on the big tech companies.
Enjoy!
www.youtube.com/watch?v=mi134c5X3ps
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
I very much enjoyed my session with the Value Investing Society at London School of Economics. I talked about Fiat Chrysler and the unusual operating model of Ferrari, future of EV's and when to sell a stock.
Enjoy!
https://www.youtube.com/watch?v=1xpY7-uyPqo
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
I enjoyed my interview at Morningstar India's The Investor's Mind with Larissa Fernand. I talked about being a harsh grader while selecting your circle, how we handled the financial crisis and the inner vs. the outer scorecards.
Enjoy!
https://www.youtube.com/watch?v=gghOEu8u6pE
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
I enjoyed my presentation and Q&A at the FLAME University, India. I talked about the operating model and growth of Coca-Cola Icecek and Varun Beverages, investing in Turkiye and other global markets and Fiat Chrysler's Ferrari.
Enjoy!
https://www.youtube.com/watch?v=A2vC2skCjCsYou can see the presentation here.
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
I very much enjoyed my session with members of the Oxford Alpha Fund from Oxford University. I talked about the circle of competence, the Japanese stock markets and returns from philanthropy.
Enjoy!
https://www.youtube.com/watch?v=0qxxVBKd8CI
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
You can also read the interview published by Oxford Alpha Fund in The Walton Edge - Volume 1 Series 3.
I very much enjoyed my session with Clemson University's Wall Street South Investment Club. I talked about anomaly-based investing, how funeral home businesses are great and car dealerships.
Enjoy!
https://www.youtube.com/watch?v=IJwOjG5gwAw
Here is the link to the podcast:
If you prefer reading over listening, here is the transcript.
In December 2017, I co-authored an article in Forbes about The "Free Lunch" Portfolio, a strategy to invest in 15 stocks across Uber Cannibals, Shamelessly Cloned Ideas and Spin-Offs. The Spin-Offs bucket was later replaced with Spawners, which I detailed in the 2021 Free Lunch Portfolio post. Each of the portfolio buckets is reassessed for changes once a year: the Cannibals in April, and Cloned Ideas and Spawners in December. I publish updates to the portfolio here on Chai With Pabrai.
The Free Lunch portfolio was up 30.3% in 2023, vs. 26.3% for the S&P 500. The portfolio managed to outperform the high-flying S&P 500. Since inception on January 1, 2018, on an annualized basis, the Free Lunch portfolio is up 5.8% while the S&P is up 12.1%. The S&P 500 has trounced the Free Lunch portfolio so far. In 2021 we decided to ignore the algorithm’s buy and sell decisions and only make portfolio tweaks if they are no-brainers. This bias towards inaction will avoid disrupting the compounding engine and should help the Free Lunch perform well over time. Since 2021, the Free Lunch portfolio is up 34.2% versus 33.1% for the S&P 500.
Tweaks to the 2024 Free Lunch Portfolio:
From our fund managers list, we replace ValueAct Capital, FPA and Sequoia Fund with Abram’s Capital, Brave Warrior Advisors and Greenlight. This December, we recommend adding Alpha Metallurgical Resources (AMR), Consol Energy, Lithia Motors and Asbury Automotive. We love these businesses. To bring them in, we recommend selling Alibaba (Cloned Idea), Tencent (Cloned Idea), Restaurant Brands (QSR) and Starbucks (Spawner). The swaps are no-brainers at present prices (the threshold we need to meet to make a change to the portfolio). AMR, Consol, Lithia and Asbury all operate in out-of-favor industries and generate a significant amount of free cash flow.
Here are the constituents for the upcoming year:Spawners
Shameless Cloning
Uber Cannibals
If you are a new investor to the Free Lunch Portfolio, you can just equal weight these 16 stocks (i.e., invest the same amount of money in each of these 16) between now and early January 2024.
If you are already invested in the Free Lunch Portfolio, and you rebalanced the Uber Cannibals in April 2023 with the New Uber Cannibals, then sell Alibaba, Tencent, Restaurant Brands and Starbucks and invest the proceeds equally between AMR, Consol, Lithia and Asbury.
As a reminder, the new Uber Cannibals get published every April, while the new Spawners and Shameless Cloning businesses are released in January. When we publish the new Uber Cannibals in April 2024, sell the Ubers that are no longer on the new list and invest the proceeds equally across the new Uber Cannibal picks. Then in January 2025, you’ll rebalance the Spawners and Shameless Cloning ideas.
Enjoy!
It is not easy for US retail investors to buy stocks listed on the Istanbul Stock Exchange, but Fidelity does offer the service to trade Turkish stocks by phone. Once you open an account at Fidelity.com and fund it, you can call Fidelity at +1.800.343.3548, ask for “international trading” and advise the Fidelity representative of your order. Trades are placed in Turkish Lira, so the representative can help you determine the correct number of shares that you can buy with your USD balance, after accounting for possible movements in the Turkish Lira overnight. Trades need to be placed between 5 AM and 7 PM eastern. Limit orders are generally the best way to go. To our knowledge, Fidelity is the only game in town that offers Turkish trading to US retail investors, and it charges a hefty commission (approx. $83 per ticket order). To avoid racking up significant commission charges, you will want limit the number of orders you place and try to maximize the number of shares you buy per ticket order.
Note, anyone who invests in any strategy needs to do their own research/due diligence and are themselves fully responsible for the outcome. The contents of this website are for educational and entertainment purposes only, and do not purport to be, and are not intended to be, financial, legal, accounting, tax or investment advice. Investments or strategies that are discussed may not be suitable for you, do not take into account your particular investment objectives, financial situation or needs and are not intended to provide investment advice or recommendations appropriate for you. Before making any investment or trade, consider whether it is suitable for you and consider seeking advice from your own financial or investment adviser.
