Mohnish Pabrai conference call

[fwallstreet]

This is non-investment related.

 

He mentioned that he would teach any of his employee, who is thinking of striking out,  how to start and run a business. Even if the employee is competing against him in the future

Not a single one of them clone his method.

 

Can share his methodology and advice for business owner?

I found no mention of this anywhere.

 

TIA and really grateful for opening this up.

 

Similar to the above, most of Mohnish Q&A's focus on his investment process and skills - what advice does he have on managing an investment business specifically, especialy for those who are looking to start one in the future? What are some things he wished he had known when launching his fund and the lessons learned from his mistakes/experience managing a hedge fund?

 

Hopefully, I'm getting the gist of my question across but looking for insight into the aspects of how he manages the business outside of actual investing, like marketing (or lack thereof if mainly through referrals), communication with investors, etc etc - especially as it relates to his early years. Also, ditto the above poster, thank you Joel!

[CONeal]

My only question is... what quarter does he look at taking the insurance company public

[tylerdurden]

In his book and many of other speeches etc. he recommends holding to an investment 2-3 years no matter of what. While he is publicly promoting this idea (and cloning obviously), he sold big chunk of his Posco investment after only several quarters. Isn't this inconsistent with what he has been preaching about? (I don't think there is any fundamental change in terms of the prospects of the investment since his initial purchase)

[cubsfan]

If he thinks he made a mistake or he found something much more compelling, then I'd absolutely

want Monish to sell the position. He is not wedded to a long timeframe if these conditions occur.

This is the real world, where he is managing real money for investors.

[tylerdurden]

I totally agree with you about this being real life and he is managing real money. My question is more about what he is talking about and doing in practice. He does not have to talk about it or write a book etc. and then when he sees a better investment, sell something in a couple of quarters. I am more questioning his consistency. Guy Spier was also talking about this in his book. (Not selling 2 years at least I guess as a rule) I don't know of course Guy's standing with the posco shares now. since Mohnish does not seem to be as excited about those shares there is a chance Guy also downsized significantly... Again, it's more about the difference between principles presented in public and the practice, I am curious about. Of course anyone has the right to change his mind based on changing circumstances.

[ATLValue]

While I really respect and feel that I've learned a lot from Pabrai I feel that he is very inconsistent. The biggest example for me was his chapter on the Kelly Formula and concentrated portfolios.

[Guest]

He also jumped in and out of BAC (according to his 13F) in late 2011/early 2012 from one quarter to the next, from what I seem to remember.

[Packer16]

The selling rule is to let the thesis play out and do not sell unless you can say at a lower price the stock is fairly valued.  Also it does not preclude the purchase of a cheaper stock.  As to Posco, he could have purchased some local shares and sold some ADRs.  I am not certain of this but we will need to wait until the Korean YE disclosures come out.  A similar thing happened with Fiat.  He has held Fiat for quite awhile but the US shares are the result of (at least in part) a recent IPO not a recent large purchase.

 

Packer

[Guest]

Packer,

 

What are Korean YE disclosures? Is this like a 13F for Korean securities, something issued by the company disclosing large investors, or something else?

[petey2720]

He also jumped in and out of BAC (according to his 13F) in late 2011/early 2012 from one quarter to the next, from what I seem to remember.

 

This was tax loss selling.  He bought WFC in the meantime as a hedge against BAC going up during those 30 days, which it did.

[valueorama]

(Not selling 2 years at least I guess as a rule)

 

I think you are reading it as a hard rule. My opinion is that one should buy a company as if it is going to held for at least 2yrs. If the thesis plays out or your analysis is wrong or you find a cheaper stock, sell as soon as possible.

[tylerdurden]

(Not selling 2 years at least I guess as a rule)

 

I think you are reading it as a hard rule. My opinion is that one should buy a company as if it is going to held for at least 2yrs. If the thesis plays out or your analysis is wrong or you find a cheaper stock, sell as soon as possible.

 

Absolutely, i totally agree again. In this case though, it seems he replaced like 2/3 of Posco with Google. Now, google is a company that I like as well but nothing is really different in terms of the thesis for both of these companies for the last several quarters and google is like real household name that everybody is aware of in terms of the story so why would a highly reputable value investor buy a thesis just to replace it with another well-known one in a couple of quarters although there are not much of a difference in terms of the stories (at least as far as I can see of course). There are no crazy price moves during this time frame either for a value investor. I think this is more about investing in a better idea (google) rather than switching into the Korean shares since he still owned 1/3 of the posco shares as of dec 31. If there was a significant advantage of having korean shares, he could have switched all shares. Anyways, I learnt a lot from Mohnish's book and speeches etc. and I am thankful for that but i am somewhat confused if i have to be honest. I also remembered his speech at Google and he was also explaining why Google is a great company but it might not be a good investment because it's in the fast changing IT area etc. Go figure...

[wescobrk]

While I really respect and feel that I've learned a lot from Pabrai I feel that he is very inconsistent. The biggest example for me was his chapter on the Kelly Formula and concentrated portfolios.

 

He's very successful and good at what he does, but I agree, a lot of times he contradicts what he says.

He's very confusing to me at times. His latest interview about not giving stock picks but then he does nothing but gives stock picks.

[Guest]

Thanks,  petey.  I wondered what was going on with that one.

[Guest JoelS]

I had a similar question in mind, with a different example, that being the Japanese net-nets. I believe the rationale for selling (before the thesis played out) was better opportunities elsewhere. My question would be something like: "was it a mistake to sell the net nets before the Japan thesis played out?".. or "was it a mistake to buy the basket in the first place?". I saw this as a contradiction of the general rule in his book that others have mentioned…

 

"Any stock that you buy cannot be sold at a loss within two to three years of buying it, unless you can say with a high degree of certainty that current intrinsic value is less than the current price the market is offering."

[LC]

How structured is his investment process? He has given talks about how only invests in potential doubles/triples/ etc. I am referring to his columbia presentation about 26%/year target. But it seems he has deviated from this. Does he look at this as a philosophical guideline or a practical guideline?

 

How well does he get to know management? What do his conversations with management look like?

[Guest JoelS]

Please find the call with Mohnish attached. It starts on pg 12. I'll have to apologise in advance as the write up is directed at University students and may be beneath many of you. Hopefully it still provides some value. Cheers,

 

Joel

Bulletin_-_2015_1st_ed..pdf

[Guest notorious546]

Please find the call with Mohnish attached. It starts on pg 12. I'll have to apologise in advance as the write up is directed at University students and may be beneath many of you. Hopefully it still provides some value. Cheers,

 

Joel

 

Thanks Joel. I still wonder why he still holds ZINC! the previous thesis seems to have played out quite well

[cubsfan]

That's a nice interview with Monish - thanks for posting. A few new insights included.

[peter1234]

Thank you very much for sharing!

:)

[Gamecock-YT]

Thanks Joel, I enjoyed it!

[gfcfa]

Thanks very much for sharing this, Joel.  Very kind of you!  Warmest regards...George.

[investor-man]

thanks for posting! interesting read

[AzCactus]

Thanks for posting...Some good stuff.  I would still want to know more about Zinc and what his thesis is moving forward.

[Eye4Valu]

Interesting as always! Thanks!