UHAL (U-Haul)
“My algorithm was simple — a friend told me uhal had over 5 at the time, so I checked with different people and confirmed it really was around $50, so I bought.” — Duan Yongping (2010-03-09)
🏢 Basic Information
- Industry: Moving / Truck Rental Services
- Purchase Time: Around 2003, when UHAL entered bankruptcy protection
- Purchase Price: Around 50)
- Investment Return: Multi-bag return (later rose to nearly $100)
- Characteristics: Cigar Butt stock, hidden asset investment
💡 Duan Yongping’s Core Views
Why Buy UHAL?
My algorithm was simple — a friend told me uhal had over 5 at the time, so I checked with different people and looked into it myself, confirmed it really was around $50, so I bought. This kind of opportunity is what Buffett talks about when manna falls from heaven? The key thing is that your bucket needs to be big enough, or you won’t catch much. (2010-03-09)
UHAL’s Core Business
Through a series of investigations, Duan Yongping discovered that UHAL’s core business operations were solid with outstanding competitive advantages, stable sales revenue, and abundant cash flow. As long as the company could cut its losses by exiting high-risk investment areas while selling some commercial real estate, its financial numbers would improve immediately. (“The Nature of Investing”)
💡 Deep Analysis of UHAL’s Investment Logic
UHAL is one of Duan Yongping’s rare “cigar butt” investments, differing from his usual “good company at good price” strategy:
Why was this a cigar butt stock?
- Stock price 50 — extremely deep discount (90% discount)
- Company entered bankruptcy protection; market in extreme panic
- Core business (moving/truck rental) remained sound; only financial structure had problems
Relationship to Duan Yongping’s usual strategy Duan Yongping called this “manna from heaven” — such opportunities are extremely rare, not his normal strategy. He usually focuses more on good business models rather than asset discounts. But when discounts reach this magnitude (90%), even an average business model becomes worth buying.
Meaning of “bucket needs to be big enough”
“The key thing is that your bucket needs to be big enough, or you won’t catch much.”
This means: when manna falls from heaven, you need sufficient position size to receive it. Maintaining adequate cash/position capacity normally allows you to buy heavily when extreme opportunities arise.
❓ Selected Q&A
Q: What kind of investment opportunity was UHAL?
**A}: Yes, Yahoo was one, and back then Uhal was too (listed companies with hidden assets not reflected on books). (2010-03-26, Investment Logic)
Q: What were UHAL’s hidden assets?
**A}: Sometimes they exist — like when I bought Uhal back then. Uhal owned very valuable real estate but it couldn’t show up in financial statements. (2010-05-11, Investment Logic)
**Q}: How was the decision to invest in UHAL made?
**A}: The main purpose of having people look was to examine assets, not verify authenticity. Uhal’s asset situation was complex; took a long time (several weeks) to fully understand. (2012-02-02, Investment Logic)
Q: How do you interpret: “Unfortunately bought right at the bottom, so didn’t buy enough”?
**A}: Unfortunately bought right at the bottom, so didn’t buy enough. (2012-02-02, Investment Logic)
**Q}: How does UHAL differ from NetEase and Apple-type investments?
**A}: (Duan Yongping didn’t directly compare, but can be inferred from his investment logic) UHAL is a typical “asset discount”-type investment, whereas NetEase and Apple are “business model”-type investments.前者 relies on extremely undervalued pricing,后者 relies on deep understanding of future cash flows. Both are value investing, but paths differ.
📚 Investment Insights
The UHAL case illustrates:
- Value of hidden assets: Financial reports can’t reflect all value; deep research needed
- Application of rough estimation: No precise calculation needed; rough judgment suffices (50 net assets)
- Bucket needs to be big enough: When manna falls from heaven, you need sufficient position size to receive it
- Cut losses to survive: When good companies make mistakes, it’s often a buying opportunity
- Spend time researching: “Took a long time (several weeks) to fully understand” — even rough estimation requires serious research
🔗 Related Notes
Related Concepts Rough Estimation · Margin of Safety · Buying Stocks Is Buying Companies Related People Duan Yongping Related Topics Duan Yongping’s Classic Investment Cases · How to Research a Company