Big Bulls of Dalal Street – Mohnish Pabrai

2018-11-27

Big Bulls of Dalal Street – Mohnish Pabrai

Mohnish Pabrai is the founder of Pabrai Investments Funds through which he manages 800 million USD. He is based in the US and actively invests in Indian markets. He is very impressed by Warren Buffet’s investment style and follows it for his investments as well. He paid out 650,000 USD in 2007 to attend a charity dinner with Warren Buffet. He has written many bestseller books including the famous “Dhandho Investor”. He has excellent track record and has beaten the market returns by more than 1100% since 2000. He also runs the Dakshana Foundation in India to support higher education of poor kids.

Mohnish Pabrai

Mohnish Pabrai with Warren Buffet (outlookbusiness.com)

Investing Career

Mohnish Pabrai started his career with Tellabs in 1986 in the US. He 1991, he started his own IT consulting and systems integration company called TransTech with an investment of 100,000 USD. The company was focused on outsourcing the tech work to India leveraging the cheaper workforce compared to the USA. He sold the company to Kurt Salmon Asssociates in 2000 for 20 million USD. Using this money, he set up Pabrai Investment Funds inspired by Warren Buffet’s partnership model.

One of his initial picks was Stewart Enterprises, a funeral services company in the US. He picked up the stock at 2 $ when it was facing a crisis due to pending loan payments. Pabrai saw that the company had a higher intrinsic value and healthy cashflows using which it would be able to service the debt. As expected, the company cleared the debt and stock price rallied to 8 $ per share in a short span of time earning great returns for Mr. Pabrai. Some of his other big returns came from Level 3 Communications, Frontline and USAP in the US. In recent times, he has turned his focus to India and has majority of his investments here. Some of his Indian investments include Rain Industries, Sunteck Realty, Kaveri Seed Corporation, Repco Home Finance, CARE Ratings, etc.

Investing Philosophy

Mr. Pabrai believes in long term investing in simple businesses which can even be run by an idiot and are trading at high discounts to their intrinsic value. He believes in being highly picky while choosing the stock and minimizing the risk by finding situations where you can buy the stock much below its real value. He uses the mantra: Big bets, infrequent bets for his investments which means he is very selective in picking up a stock but takes big positions after finalizing the stock.

Here is the complete list of Mohnish Pabrai’s latest stock holdings: Mohnish Pabrai Portfolio Stocks

Important Links

You can follow us on Facebook to receive all the updates and new posts : https://www.facebook.com/ShareMktGuru/

Disclaimer: I am not a SEBI registered analyst and not advising anyone to buy. The purpose of this article is to share my viewpoint about fundamentals and the future prospects of the company. So, please do not consider this as an investment tip. Talk to your financial advisor before taking any investing call.

Sending
User Review
5 (1 vote)

Add Comment

%d bloggers like this: