- From earlier Pabrai interview
Transcript from the interview with Pabrai (my bold)
“…one time I was having dinner with Charlie, and … he said if an investor just did three things, the end results would be vastly better than the rest.
And he said one is carefully look at what the other great investors have done....
And the second thing he said is, look at the cannibals. And what he meant by "look at the cannibals" is, look carefully at the businesses that are buying back huge amounts of their stock. Because they're eating themselves away, so he called them the cannibals.
And the third is, he said, carefully study spinoffs."
- The ETF strategy focuses on these three components: Share Buyback, Spin-offs, and Select Value Manager Holdings
Prospectus: https://www.dhandhoetfs.com/documents/p ... 0401-1.pdf
“Index” provider: http://www.indxx.com/dhandho.php
- Annualized return (%)/annualized standard deviation 6/2009 to 3/2016
20.4/ 14.3 = "Dhandho Junoon Index"
16.9/ 14.9 = Russell Midcap Value
15.2/ 13.5 = Russell 1000
- Alpha = 0.42
Market = 0.96
Size = 0.25
Value = 0.20
Momentum = 0.06
Quality = 0.08
R^2 = 0.92
So midcap value (0.25 size load and 0.20 value load), with close to zero momentum and quality loads. Monthly alpha = 0.42%, annual alpha = 5.07% (for the period of the simulated backtest).
Will be interesting to see how this performs. Munger obviously has keen insights, as does Pabrai, but implementation also matters.