Mohnish Pabrai

[Pellom]

On 4/25/2025 at 1:26 PM, Patmo said:

Finance as a whole, and managing OPM in particular, is all a pure sales industry. He who has more AUM is the more successful salesman. Every single finance related person I've ever met has reinforced that belief. No finance guy will ever admit as much directly, but this is the reality.

 

All you suckers in the industry hating on this guy for his returns are being ridiculous as far as I'm concerned, he's just doing better than your jealous asses while carrying a handicap.

 

On 4/25/2025 at 1:32 PM, Blake Hampton said:

I would like to say that I actually like Mohnish. He's taught me a lot.

 

I like Mohnish as well from an educator's perspective. 

 

However, the "shameless cloner" thing is frustrating given his underperformance. Buffett told he and Guy Spier directly that they shouldn't charge a management fee if they were just going to copy him. 

 

Underperformance can be understood if you are attempting to forge your own path. In his specific case, he would have done more good to tell his clients to buy Berkshire directly. 

[Vish_ram]

Crazy myth building going on, full of inaccurate tweets, posts and articles.  
 

what a world we live in! Who is behind all this. 

 

 

[Malmqky]

8 minutes ago, Vish_ram said:

Crazy myth building going on, full of inaccurate tweets, posts and articles.  
 

what a world we live in! Who is behind all this. 

 

 

 

Charlie only gave money to Li Lu, correct?

[Whensthepaintdry?]

Does anyone know how much he made on Reysas? I think I heard him say he had 100x already. 

[Vish_ram]

11 minutes ago, Malmqky said:

 

Charlie only gave money to Li Lu, correct?

Yes to all available info. 

[Munger_Disciple]

The latest Pabrai Funds numbers according to this Twitter post:

 

Can't find 600X returns anywhere here. 

Edited April 28, 2025 by Munger_Disciple

[Munger_Disciple]

31 minutes ago, Malmqky said:

 

Charlie only gave money to Li Lu, correct?

 

I believe Charlie also gave money to an Australian fund manager to invest. IIRC he said it was mainly to encourage the manager because Charlie liked the way he thought. 

Edited April 28, 2025 by Munger_Disciple

[Malmqky]

5 minutes ago, Munger_Disciple said:

 

I believe Charlie also gave money to an Australian fund manager to invest. IIRC he said it was mainly to encourage the manager because Charlie liked the way he thought. 

 

Thanks for the info. if anyone is interested, I found this:

 

https://www.thestreet.com/investing/berkshires-munger-invests-in-soulmate-australian-firm

[pricingpower]

7 hours ago, Munger_Disciple said:

Charlie also gave money to an Australian fund manager to invest

It’s fascinating how active Munger stayed, refreshing article:

 

https://www.afr.com/wealth/investing/charlie-munger-s-australian-friend-says-he-was-a-great-capitalist-20231129-p5enul

[Brett]

On 4/28/2025 at 1:19 PM, Malmqky said:

 

Charlie only gave money to Li Lu, correct?

He invested in Stonehouse and one other investment manager. I don't know who the other one is, though.

[villainx]

3 hours ago, Brett said:

He invested in Stonehouse and one other investment manager. I don't know who the other one is, though.

 

As a test, only Perplexity included Stonehouse, Gemini and Chatgpt only had Li Lu.

 

 

[LakesideB]

The discussion here seems so one-sided. It feels like whenever there is underperformance, certain individuals respond strongly. There is a lot of misinformation in this thread. These individuals know some of the details are wrong, but choose to keep quiet.

 

To Vish_ram's point, yes, he is underperforming on the 20-year number. The underperformance is 1.7% in Pif 2, but is matching S&P500 in Pif3. The concentrated coal bets have been hit hard. Focusing on 5-year performance is instructive as it captures his evolution as a manager, for I believe he has become a better investor with time. On a 5yr basis, the performance matches to outperforms S&P500, depending on the fund. These numbers include the heavy coal bets, which were about 30% of the portfolio and are down some 50-60%. With enough time, these coal bets will likely rebound significantly, lifting the 20-year number - a significant value add to ~$1 billion in assets. Once it becomes positive, I am confident there will be no screenshots and detailed Excel analysis of his performance by individuals like Vish_ram. Looks like response is only warranted when things look good for one's agenda.

 

There are some completely inaccurate comments, such as the person who mentions that he continues to charge a 1.5% management fee or that Buffett instructed him and Guy to charge zero fees. He started Pabrai funds in 1999 with a zero-fee model from the beginning. He met Buffett for the first time at lunch in 2007. After the blowups during the GFC, unlike the majority of managers, he kept operating for a decade+ with zero fees after the great financial crisis and only started earning fees when clients were above the high watermark. Vish_ram knows all this and can easily correct the misinformation, but chooses to stay quiet.

 

Pif4's performance is worse than others as he couldn't include some of his best ideas due to restrictions. For example, it doesn't hold Reysas, which he invested at $16m valuation and has recently traded at $1 billion market cap. It is a restricted portfolio and a subset of his best ideas, and not one where most of the assets are.

 

At the end of the day, he runs a highly concentrated portfolio. Some might think having 10-15 names is concentrated, but his top 2 names are more than 50% of the assets, with 4 to 5 positions doing nearly all the work. At certain times, he may seem like a poor investor, while at other times, he may look pretty good. Yes, the 20-year performance varies from an underperformance to matching s&p500, depending on the fund. There were significant blowups during the GFC, with the funds down 65% or so, as mentioned by him in several videos. All these are reflected in the 20-year number. 

 

But what happens in 2028, when the blowups from GFC aren't in the numbers any longer and coal has rebounded? 

 

Attacking him when things don't look good and remaining silent on misinformation being spewed, and when things do look good, tells me more about one's integrity.

 

Folks saying Charlie didn't give him money to invest as some sort of negative is amusing. Never mind the fact that Charlie actively chose to become friends with him late in his life, despite being inundated with marketing finance types throughout his life.

 

I can understand folk's frustration here. But I think instead of selectively attacking someone's work, it would be more productive to clone someone like him to try to make this world a better place. 

Edited May 6, 2025 by LakesideB
brevity

[Malmqky]

9 minutes ago, LakesideB said:

The discussion here seems so one-sided. It feels like whenever there is underperformance, certain individuals respond strongly. There is a lot of misinformation in this thread. These individuals know some of the details are wrong, but choose to keep quiet.

 

To Vish_ram's point, yes, he is underperforming on the 20-year number. The underperformance is 1.7% in Pif 2, but is matching S&P500 in Pif3. The concentrated coal bets have been hit hard. Focusing on 5-year performance is instructive as it captures his evolution as a manager, for I believe he has become a better investor with time. On a 5yr basis, the performance matches to outperforms S&P500, depending on the fund. These numbers include the heavy coal bets, which were about 30% of the portfolio and are down some 50-60%. With enough time, these coal bets will likely rebound significantly, lifting the 20-year number - a significant value add to ~$1 billion in assets. Once it becomes positive, I am confident there will be no screenshots and detailed Excel analysis of his performance by individuals like Vish_ram. Looks like response is only warranted when things look good for one's agenda.

 

There are some completely inaccurate comments, such as the person who mentions that he continues to charge a 1.5% management fee or that Buffett instructed him and Guy to charge zero fees. He started Pabrai funds in 1999 with a zero-fee model from the beginning. He met Buffett for the first time at lunch in 2007. After the blowups during the GFC, unlike the majority of managers, he kept operating for a decade+ with zero fees after the great financial crisis and only started earning fees when clients were above the high watermark. Vish_ram knows all this and can easily correct the misinformation, but chooses to stay quiet.

 

Pif4's performance is worse than others as he couldn't include some of his best ideas due to restrictions. For example, it doesn't hold Reysas, which he invested at $16m valuation and has recently traded at $1 billion market cap. It is a restricted portfolio and a subset of his best ideas, and not one where most of the assets are.

 

At the end of the day, he runs a highly concentrated portfolio. Some might think having 10-15 names is concentrated, but his top 2 names are more than 50% of the assets, with 4 to 5 positions doing nearly all the work. At certain times, he may seem like a poor investor, while at other times, he may look pretty good. Yes, the 20-year performance varies from an underperformance to matching s&p500, depending on the fund. There were significant blowups during the GFC, with the funds down 65% or so, as mentioned by him in several videos. All these are reflected in the 20-year number. 

 

But what happens in 2028, when the blowups from GFC aren't in the numbers any longer and coal has rebounded? 

 

Attacking him when things don't look good and remaining silent on misinformation being spewed, and when things do look good, tells me more about one's integrity.

 

Folks saying Charlie didn't give him money to invest as some sort of negative is amusing. Never mind the fact that Charlie actively chose to become friends with him late in his life, despite being inundated with marketing finance types throughout his life.

 

I can understand folk's frustration here. But I think instead of selectively attacking someone's work, it would be more productive to clone someone like him to try to make this world a better place. 

 

Found Monish Pabrai's burner

 

On a serious note, Pabrai is a good person and I respect that. However I've still yet to see any concrete proof he's an above average investor. Do you have any proof he is?

[oscarazocar]

1 hour ago, LakesideB said:

The discussion here seems so one-sided. It feels like whenever there is underperformance, certain individuals respond strongly. There is a lot of misinformation in this thread. These individuals know some of the details are wrong, but choose to keep quiet.

 

To Vish_ram's point, yes, he is underperforming on the 20-year number. The underperformance is 1.7% in Pif 2, but is matching S&P500 in Pif3. The concentrated coal bets have been hit hard. Focusing on 5-year performance is instructive as it captures his evolution as a manager, for I believe he has become a better investor with time. On a 5yr basis, the performance matches to outperforms S&P500, depending on the fund. These numbers include the heavy coal bets, which were about 30% of the portfolio and are down some 50-60%. With enough time, these coal bets will likely rebound significantly, lifting the 20-year number - a significant value add to ~$1 billion in assets. Once it becomes positive, I am confident there will be no screenshots and detailed Excel analysis of his performance by individuals like Vish_ram. Looks like response is only warranted when things look good for one's agenda.

 

There are some completely inaccurate comments, such as the person who mentions that he continues to charge a 1.5% management fee or that Buffett instructed him and Guy to charge zero fees. He started Pabrai funds in 1999 with a zero-fee model from the beginning. He met Buffett for the first time at lunch in 2007. After the blowups during the GFC, unlike the majority of managers, he kept operating for a decade+ with zero fees after the great financial crisis and only started earning fees when clients were above the high watermark. Vish_ram knows all this and can easily correct the misinformation, but chooses to stay quiet.

 

Pif4's performance is worse than others as he couldn't include some of his best ideas due to restrictions. For example, it doesn't hold Reysas, which he invested at $16m valuation and has recently traded at $1 billion market cap. It is a restricted portfolio and a subset of his best ideas, and not one where most of the assets are.

 

At the end of the day, he runs a highly concentrated portfolio. Some might think having 10-15 names is concentrated, but his top 2 names are more than 50% of the assets, with 4 to 5 positions doing nearly all the work. At certain times, he may seem like a poor investor, while at other times, he may look pretty good. Yes, the 20-year performance varies from an underperformance to matching s&p500, depending on the fund. There were significant blowups during the GFC, with the funds down 65% or so, as mentioned by him in several videos. All these are reflected in the 20-year number. 

 

But what happens in 2028, when the blowups from GFC aren't in the numbers any longer and coal has rebounded? 

 

Attacking him when things don't look good and remaining silent on misinformation being spewed, and when things do look good, tells me more about one's integrity.

 

Folks saying Charlie didn't give him money to invest as some sort of negative is amusing. Never mind the fact that Charlie actively chose to become friends with him late in his life, despite being inundated with marketing finance types throughout his life.

 

I can understand folk's frustration here. But I think instead of selectively attacking someone's work, it would be more productive to clone someone like him to try to make this world a better place. 

 

From the numbers posted higher in the thread, since the start of 2020, S&P has returned 89% and Pabrai's fund is down 6%.  How do you get him outperforming the S&P in the last 5 years?

 

You spend a paragraph saying that he is hugely concentrated, his biggest position is down 50-60%, but if you assume that position goes up a lot then his numbers will be better.  That is true, but also, anyone will outperform if you assume that their investments will outperform, even though the historical record is that they have underperformed.

 

On the Munger stuff, people weren't saying that Munger not giving him money was some kind of negative sign, they were responding to a Twitter post saying that Munger had given him money to invest when that was not true.  What I find odd is that there is a lot of stuff on Twitter making claims about Pabrai that are not true - like that Munger has given him money or that he has some outrageously good historical returns or that he is a billionaire - and he sometimes retweets the posts.  That's highly unusual behavior.

[LakesideB]

As of 2024 end, on a 5yr basis, Pif3 is up +21.4% net of fees vs S&P up by +14.5% an outperformance of +6.9%. Pif 2 is 14.6% vs 14.5%. Since inception, over 25 years, he has outperformed the index by 5.6% in Pif2. For Pif3, since its inception in 2002, the outperformance is 3.1%. 

 

I scrolled up the thread and see his Q1 numbers have been released and its down 25%. I avoid looking at quarterly numbers for such an insanely concentrated fund. Quarterly numbers are more noise than signal. For example, Reysas is a massively significant top position. Late in 2024, the Reysas CEO comes out on Bloomberg TV and states earnings will double in 2025. Yet, Reysas is down 30% YTD. Why? Who knows. It's noise.  

 

I am just saying on a 5yr basis ending 24, you have S&P whose top 7 names have hit it outside the park and are currently 35% of the index weight. At the start of the year, S&P500 traded at one of the highest multiples. History hasn't been too kind for prospective 10year returns to anyone investing in S&P 500 at its highest multiples.  Yet you have Pifs, who have done well against S&P despite not having any exposure to the magnificent 7 and underforming coal bets. The portfolios trade at mid to high single digit P/Es. 

 

Probabilistically high likelihood of one outperforming the other over the next 5 to 10 years. 

 

I am out from this discussion. I have watched in amusement over the years the discussions on this thread and the previous, now closed, threads on him. I purposefully stay away as it can be a tremendous time suck. The amount of misinformation, especially regarding fees etc, was just too much to take.

 

Good luck to all! 

Edited May 6, 2025 by LakesideB
brevity

[Gregmal]

4 minutes ago, LakesideB said:

As of 2024 end, on a 5yr basis, Pif3 is up +21.4% net of fees vs S&P up by +14.5% an outperformance of +6.9%. Pif 2 is 14.6% vs 14.5%. Since inception, over 25 years, he has outperformed the index by 5.6% in Pif2. For Pif3, since its inception in 2002, the outperformance is 3.1%. 

 

I scrolled up the thread and see his Q1 numbers have been released and its down 25%. I avoid looking at quarterly numbers for such an insanely concentrated fund. Quarterly numbers are more noise than signal. For example, Reysas is a massively significant top position. Late in 2024, the Reysas CEO comes out on Bloomberg TV and states earnings will double in 2025. Yet, Reysas is down 30% YTD. Why? Who knows. It's noise.  

 

I am just saying on a 5yr basis ending 24, you have S&P whose top 7 names have hit it outside the park and are currently 35% of the index weight. At the start of the year, S&P500 traded at one of the highest multiples. History hasn't been too kind for prospective 10year returns to anyone investing in S&P 500 at its highest multiples.  Yet you have Pifs, who have done well against S&P despite not having any exposure to the magnificent 7 and underforming coal bets. The portfolios trade at mid to high single digit P/Es. 

 

Probabilistically high likelihood of one outperforming the other over the next 5 to 10 years. 

Well the coincidental and mitigating factor here is 5 years coincides almost exactly with the Covid bottom. Any idiot owning anything should’ve outperformed any index from the given point. It’s a clear outlier.

[wabuffo]

https://thecobf.com/forum/topic/17613-how-to-make-money-from-this-crash-lessons-from-2008/#findComment-388642

 

"buy the trashiest micro-caps you can and buy a bunch"  -- quoted literally on the day the S&P hit its COVID bottom tick....

 

Not specific to this thread - but Gregmal's referencing the COVID bottom gave me flashbacks to that time when fear ruled.

 

Bill

[LakesideB]

5yr starts end of 2019 - ie, valuations unaffected by COVID yeah? Markets starting tanking early 2020 with bottom in April/May and recovering ferociously so not affecting the starting valuations but sure any idiot can outperform S&P500 over that time period net of fees without owning any Mag7.

 

Edited May 6, 2025 by LakesideB

[Vish_ram]

@LakesideB for the record

 

I admire Pabrai for his philanthropic efforts, his marketing ability and explaining skills. 

The portrayal that he is a super-investor is iffy at best. 

 

Also, there is nothing wrong in underperforming S&P 500. Millions of investors and tens of thousands of professionals do underperform. If you come out in the open and talk about cloning, value investing etc, then your returns should be scrutinized. Absolutely nothing wrong in that. 

 

it is nothing personal, just business. I wish Pabrai all the success so that he can continue to help people. 

 

Now the numbers. Just draw your own conclusions. In fact PiF3 was better in last 5 years. I’ve updated the returns to include Q1-2025. Please correct if I’ve missed anything. 

 

 

 

 

 

[Vish_ram]

WAGNX has been in market for too short a time to make a meaningful comment. One should give at least 5 years. 

 

Pabrai has talked a lot about S&P P/E etc and made bold statements that S&P 500 will do poorly etc (kind of self serving). He made a similar prediction about MSFT decades ago and it did really well. He made a similar prediction about AMZN saying they staple some $10 (or some X amount) cash to every order they sell decade or so ago and AMZN did phenomenally well. 

 

Again no one is perfect and making predictions are tough. One should develop some humility when one's track record is average to poor and past predictions haven’t panned out good. 

[oscarazocar]

On 5/6/2025 at 2:37 PM, Vish_ram said:

WAGNX has been in market for too short a time to make a meaningful comment. One should give at least 5 years. 

 

Pabrai has talked a lot about S&P P/E etc and made bold statements that S&P 500 will do poorly etc (kind of self serving). He made a similar prediction about MSFT decades ago and it did really well. He made a similar prediction about AMZN saying they staple some $10 (or some X amount) cash to every order they sell decade or so ago and AMZN did phenomenally well. 

 

Again no one is perfect and making predictions are tough. One should develop some humility when one's track record is average to poor and past predictions haven’t panned out good. 

 

Pabrai made some comments on a recent podcast about Ted Weschler that aren't remotely close to being true.

He said that Weschler was down 70% in the 2007-2009 period and was 30 points behind the S&P in those years and that his track record looked horrible when Berkshire hired him.  See link/quotes below.

 

Here are Weschler's returns at Peninsula vs. S&P from 2006-2011, with cumulative 2007-2009 results vs. S&P broken down.  Even if you look at the intra-quarter numbers, the absolute worst drawdown for Peninsula was 50% from 2007 Q4 to 2008 Q4 and S&P in that period was -41%, so not within a mile of lagging by 30 points.  Also, over the 3 year period mentioned, Peninsula was up 32.7% and S&P was down 15.9%.  Peninsula was above its high-water mark from 2007 Q3 by 2009 Q3.

 

The story here was that Weschler had horrendous returns relative to S&P so that other managers who have had similar horrendous returns over multi-year periods can in fact be wonderful investors.  Except the story isn't true.

 

 

https://www.theinvestorspodcast.com/episodes/investing-and-life-lessons-w-mohnish-pabrai/

 

 

[01:02:25] Mohnish Pabrai: Well, I would just like to point out something that when Ted Wexler was being hired by Berkshire Hathaway, I think he joined in 2010, thereabouts. I think around then, and maybe a little bit later, but in the 2007 to 2009 time period, he was down more than 70%. So they hired a guy who, when they looked at the recent past before they hired him, it looked horrible.

 

[01:02:57] Mohnish Pabrai: The numbers looked horrible. He was 30 points behind the S&P in those years, but they still hired him because they looked kind of past, they looked at the kind of longer term record and went with that. So I think the thing is that when we look at someone like, let’s say Steve Bomber, you know, there, there’ve been three CEOs at Microsoft, and I talked to some Microsoft investors who hate the period of owning the stock when Steve Bomber was CEO, but it really wasn’t fully Steve Bomber’s fault.

 

[01:03:34] Mohnish Pabrai: He came in when the stock was ridiculously overvalued and he left when it was ridiculously undervalued. And then Satya comes in with an undervalued company and he hit her out of the park. So, I mean, he created a lot of value, but he was, his starting point was a value stock. And so we can get a lot of distortions even looking at 10 year periods because of this notion, because you know, markets can be very overvalued.

 

[01:04:03] Mohnish Pabrai: So I would say that anyone, when they’re compared to the S&P in the last decade is going to not be looking great because the S&P is coming off in incredible tenures. But the next 10 years, a lot of yo-yos will probably beat the S&P. Okay. Because it’s so elevated. So I think the selection of an investment manager is one of the most difficult things to do. Very hard to do.

 

 

[Stuart D]

4 hours ago, oscarazocar said:

 

Pabrai made some comments on a recent podcast about Ted Weschler that aren't remotely close to being true.

He said that Weschler was down 70% in the 2007-2009 period and was 30 points behind the S&P in those years and that his track record looked horrible when Berkshire hired him.  See link/quotes below.

 

Here are Weschler's returns at Peninsula vs. S&P from 2006-2011, with cumulative 2007-2009 results vs. S&P broken down.  Even if you look at the intra-quarter numbers, the absolute worst drawdown for Peninsula was 50% from 2007 Q4 to 2008 Q4 and S&P in that period was -41%, so not within a mile of lagging by 30 points.  Also, over the 3 year period mentioned, Peninsula was up 32.7% and S&P was down 15.9%.  Peninsula was above its high-water mark from 2007 Q3 by 2009 Q3.

 

The story here was that Weschler had horrendous returns relative to S&P so that other managers who have had similar horrendous returns over multi-year periods can in fact be wonderful investors.  Except the story isn't true.

 

 

https://www.theinvestorspodcast.com/episodes/investing-and-life-lessons-w-mohnish-pabrai/

 

 

[01:02:25] Mohnish Pabrai: Well, I would just like to point out something that when Ted Wexler was being hired by Berkshire Hathaway, I think he joined in 2010, thereabouts. I think around then, and maybe a little bit later, but in the 2007 to 2009 time period, he was down more than 70%. So they hired a guy who, when they looked at the recent past before they hired him, it looked horrible.

 

[01:02:57] Mohnish Pabrai: The numbers looked horrible. He was 30 points behind the S&P in those years, but they still hired him because they looked kind of past, they looked at the kind of longer term record and went with that. So I think the thing is that when we look at someone like, let’s say Steve Bomber, you know, there, there’ve been three CEOs at Microsoft, and I talked to some Microsoft investors who hate the period of owning the stock when Steve Bomber was CEO, but it really wasn’t fully Steve Bomber’s fault.

 

[01:03:34] Mohnish Pabrai: He came in when the stock was ridiculously overvalued and he left when it was ridiculously undervalued. And then Satya comes in with an undervalued company and he hit her out of the park. So, I mean, he created a lot of value, but he was, his starting point was a value stock. And so we can get a lot of distortions even looking at 10 year periods because of this notion, because you know, markets can be very overvalued.

 

[01:04:03] Mohnish Pabrai: So I would say that anyone, when they’re compared to the S&P in the last decade is going to not be looking great because the S&P is coming off in incredible tenures. But the next 10 years, a lot of yo-yos will probably beat the S&P. Okay. Because it’s so elevated. So I think the selection of an investment manager is one of the most difficult things to do. Very hard to do.

 

 

Appreciate the work you’ve done here.

[This2ShallPass]

I added more to the Pabrai Wagons fund, mainly because I get exposure to ideas that I won't be able to buy and I feel the pf as constructed currently will do well.

 

Liked his recent update—he trimmed exposure to coal and car dealerships, and bought VAL, NE, and TDW. I had already started building positions in these three earlier this year, so I was familiar with them. Edelweiss also looks interesting. They're currently valued around $1B, and they'll be spinning off 4 units, each potentially valued around $1B according to Pabrai. The first IPO/spinoff is coming soon, expected valuation around $900M–$1.6B, so we'll soon find out if his thesis holds up. Also, TAV Airports had 95M passengers last year and expects to hit 110M this year. Edelweiss and TAV together are about 35% of his portfolio. He also bought Reysas in the fund (5% position).

[coc]

On 5/8/2025 at 1:47 PM, oscarazocar said:

 

Pabrai made some comments on a recent podcast about Ted Weschler that aren't remotely close to being true.

He said that Weschler was down 70% in the 2007-2009 period and was 30 points behind the S&P in those years and that his track record looked horrible when Berkshire hired him.  See link/quotes below.

 

Here are Weschler's returns at Peninsula vs. S&P from 2006-2011, with cumulative 2007-2009 results vs. S&P broken down.  Even if you look at the intra-quarter numbers, the absolute worst drawdown for Peninsula was 50% from 2007 Q4 to 2008 Q4 and S&P in that period was -41%, so not within a mile of lagging by 30 points.  Also, over the 3 year period mentioned, Peninsula was up 32.7% and S&P was down 15.9%.  Peninsula was above its high-water mark from 2007 Q3 by 2009 Q3.

 

The story here was that Weschler had horrendous returns relative to S&P so that other managers who have had similar horrendous returns over multi-year periods can in fact be wonderful investors.  Except the story isn't true.

 

 

https://www.theinvestorspodcast.com/episodes/investing-and-life-lessons-w-mohnish-pabrai/

 

 

[01:02:25] Mohnish Pabrai: Well, I would just like to point out something that when Ted Wexler was being hired by Berkshire Hathaway, I think he joined in 2010, thereabouts. I think around then, and maybe a little bit later, but in the 2007 to 2009 time period, he was down more than 70%. So they hired a guy who, when they looked at the recent past before they hired him, it looked horrible.

 

[01:02:57] Mohnish Pabrai: The numbers looked horrible. He was 30 points behind the S&P in those years, but they still hired him because they looked kind of past, they looked at the kind of longer term record and went with that. So I think the thing is that when we look at someone like, let’s say Steve Bomber, you know, there, there’ve been three CEOs at Microsoft, and I talked to some Microsoft investors who hate the period of owning the stock when Steve Bomber was CEO, but it really wasn’t fully Steve Bomber’s fault.

 

[01:03:34] Mohnish Pabrai: He came in when the stock was ridiculously overvalued and he left when it was ridiculously undervalued. And then Satya comes in with an undervalued company and he hit her out of the park. So, I mean, he created a lot of value, but he was, his starting point was a value stock. And so we can get a lot of distortions even looking at 10 year periods because of this notion, because you know, markets can be very overvalued.

 

[01:04:03] Mohnish Pabrai: So I would say that anyone, when they’re compared to the S&P in the last decade is going to not be looking great because the S&P is coming off in incredible tenures. But the next 10 years, a lot of yo-yos will probably beat the S&P. Okay. Because it’s so elevated. So I think the selection of an investment manager is one of the most difficult things to do. Very hard to do.

 

 

 

Thank you for this. It's safe to assume at this point that if MP opens his mouth, he's bullshitting. Obviously in this case because he's recently realized that he had the good fortune to open his fund when small cap value stocks got very cheap and has ridden his first three years of returns ever since. 

 

Edit: Anyone quoting his track record of "outperformance" based on a few early years (eg., surviorship bias - he wouldn't be in business without those) and not looking at his dollar weighted returns is a sucker.

Edited May 20, 2025 by coc

[coc]

Anyone remember when he used to go on about not disclosing his current portfolio picks/rationale for fear of bias? 27,000 podcasts and several license plates later...