Author Topic: Dhandho Holdings!  (Read 65008 times)

crastogi

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Re: Dhandho Holdings!
« Reply #140 on: July 17, 2017, 08:30:51 AM »
Having an aspirational goal is not a bad idea. You send a message that you are striving to do better.

No one wakes up aspiring to be a mediocre student. You aim for A+, work hard. It is a slippery slope when that goal becomes a subtle marketing message to lure in people. It becomes downright unethical when long term record is your retuns on first $1 that walked in.

Granted Pabrai's return have not been that great lately.  But unlike majority of the investment products, he does not get paid for assets under management.  He has to clear 6% and high water mark.  So he really does not have that much incentive do asset gathering.  In fact, i thought he was closed to investors. 

Everybody markets to some degree.  A good investor should have a good nose for marketing messages, else we will have a hard time buying individual stocks. 

What I like about Pabrai is that at least he is candid about admitting his mistakes and he occasionally does post mortems on some of them.  We all can learn from that.  Most managers never talk at length about their mistakes


tylerdurden

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Re: Dhandho Holdings!
« Reply #141 on: July 17, 2017, 10:57:53 AM »
Ok, so let's look at those.

Companies that actually went bust while he held it:
1) Delta financial - yes went bust
2) Pinnacle airlines - yes went bust
3) Horsehead (zinc) - yes went bust

Companies that had big drops while he held it:
4) Compucredit - 70% loss during GFC
5) Sears holdings - 60% loss during GFC
6) bioscript (chronimed) - 50% loss
7) CRYP - it appears that he exited this at $20 after buying at $30, and it got bought out later

Companies that he actually made money on:
8) HNR - he exited with a gain
9) Universal alloy - he had a 132% gain on this stock
10) Lear - described as a "home run" in his letters
11) International coal - 138% gain
12) Cresud - made 118% over 3 years


So, is your criteria any stock he's ever owned that ever had a big drop?  In that case, you've missed a ton, which isn't that surprising since he has a predilection for leveraged cyclical companies.

There will be winners and losers for any investor for sure and I am not really interested about his returns at all. My only objection about the guy is he doesn't have any consistency at all in terms of what he preaches and what he does in real life. One day auto stocks are invincible, a couple of month later GM warrants are held as a cash replacement only. (How smart is holding a warrant position as cash, i'll leave that to his investors!). He says he will wait 3 years at least to understand whether his idea worked or not and goes in and out positions all the time. Anyways for some people this might be considered as being insincere, deceitful etc etc. He should perhaps sit on his ass and focus on his investments rather than talk as much as he does or wait he needs more funds so he can make more moneyyyy right....

racemize

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Re: Dhandho Holdings!
« Reply #142 on: July 17, 2017, 10:59:29 AM »
He should perhaps sit on his ass and focus on his investments rather than talk as much as he does or wait he needs more funds so he can make more moneyyyy right....

His funds are all closed to new investors.

tylerdurden

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Re: Dhandho Holdings!
« Reply #143 on: July 17, 2017, 11:00:11 AM »
He should perhaps sit on his ass and focus on his investments rather than talk as much as he does or wait he needs more funds so he can make more moneyyyy right....

His funds are all closed to new investors.

That doesn't mean he won't open them in the future.

longinvestor

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Re: Dhandho Holdings!
« Reply #144 on: July 17, 2017, 11:06:33 AM »
Having an aspirational goal is not a bad idea. You send a message that you are striving to do better.

No one wakes up aspiring to be a mediocre student. You aim for A+, work hard. It is a slippery slope when that goal becomes a subtle marketing message to lure in people. It becomes downright unethical when long term record is your retuns on first $1 that walked in.

Agreed but numerical goals such as those outlandish ones  thrown out by helpers well crosses the marketing-to-lying line. How about statements such as "A third invested in double in 3, another third in 5 ...

An A+ is the same as beating the index by 1 or 2 percent over 15 years. Anything more than that is a filter for me.

Vish_ram

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Re: Dhandho Holdings!
« Reply #145 on: July 17, 2017, 12:36:28 PM »
He should perhaps sit on his ass and focus on his investments rather than talk as much as he does or wait he needs more funds so he can make more moneyyyy right....

His funds are all closed to new investors.

That doesn't mean he won't open them in the future.


The funds are frequently opened and closed. Again, it is a marketing ploy. Guess who also played hard to get. You create an atmosphere that feels exclusive, above hoi-polloi, ignoring the crowd, you feel special. You feel like part of a rarified group.

Also when you say we are closed, you are sending a subtle message to existing ones. If you exit, you may not come back. Last year it was a different tune. There were frequent mentions about how our assets are trading at a fraction of what they are worth (you wont find any fund manager who'll say our portfolio will triple in value in few years). If you exit, you will miss the ride... There are lots of psychological mind games. Bottom line is, buyer beware. A mouse having (paying to have) lunch with a lion doesn't become a lion. 

tylerdurden

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Re: Dhandho Holdings!
« Reply #146 on: July 17, 2017, 12:54:36 PM »
He should perhaps sit on his ass and focus on his investments rather than talk as much as he does or wait he needs more funds so he can make more moneyyyy right....

His funds are all closed to new investors.

That doesn't mean he won't open them in the future.


The funds are frequently opened and closed. Again, it is a marketing ploy. Guess who also played hard to get. You create an atmosphere that feels exclusive, above hoi-polloi, ignoring the crowd, you feel special. You feel like part of a rarified group.

Also when you say we are closed, you are sending a subtle message to existing ones. If you exit, you may not come back. Last year it was a different tune. There were frequent mentions about how our assets are trading at a fraction of what they are worth (you wont find any fund manager who'll say our portfolio will triple in value in few years). If you exit, you will miss the ride... There are lots of psychological mind games. Bottom line is, buyer beware. A mouse having (paying to have) lunch with a lion doesn't become a lion.

+1
I have to agree with this. I also wonder how much of a cash holdings he has. To me any value investor should have some significant cash holdings since you can't predict the time of market crashes. I have a feeling that next crises he will go through the same experience that he had in 2008, like many other to be fair to him...

Parsad

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Re: Dhandho Holdings!
« Reply #147 on: July 19, 2017, 05:50:25 PM »
This is actually not a nice summary.  I'd like to see the dozen stocks.  I think you missed Budget bonds, which he didn't invest in, but got most of the ones and then claimed it was just the beginning.

Also, he's never closed a fund, so it is rather disingenuous to solely describe him and then mentioning closed funds.

I also refer to my previous post on this topic, which does not seem to be recognized:
Quote
Ok, so the theme seems to currently be that Pabrai's returns aren't any good since he got a lot of money.  Let's examine that a little bit.

In 2003 he had 50 million AUM.
In 2004 he had 145 million AUM. 

I'd say at least one of those years starts counting as "a lot of money".

Here are the rolling 5 year statistics for Pif2 from that point on:
60% of rolling 5 year returns are greater than the S&P 500 from 2003
55.6% of rolling 5 year returns are greater than the S&P 500 from 2004

Interestingly, there are only 4 rolling 5 year periods that are negative, and 3 of them are in the last 3 years.  So, I think it is pretty clear that this underperformance that everyone is referring to is just from the last few years, just like most other value funds out there.

The Pif3 returns are fairly similar.  Pif4, for some reason, just kind of sucks.  It has performed worse than the other funds in the same periods fairly consistently.

As I mentioned earlier, all the big value guys are sucking right now.  Why single him out so hard?

Also, he's not the same as the "helpers" Buffett is talking about--Buffett singles out 2/20 and fund of funds.  Pabrai is 25% over 6%, just like Buffett was, and has not paid himself for years at a time.

I sincerely hope you guys never screw up and have someone judge you as harshly as you are doing Pabrai right now...

+1!  As I mentioned in a post when Mohnish was hitting bottom and people were piling on him...this board, just like any other, is a reverse indicator of the future.  Since that time, his funds are up around 100%.

Yeah, he hasn't performed as well as he would like for his investors, but he's only human.  Anyone who invested with him from day one is doing as well or better than the S&P500 TR to date, with PIF2 and PIF3 outperforming by about 4% annualized and PIF4 essentially breaking even.

His interests are aligned with partners, he's had massive redemptions at the bottom on two occasions, and continues to fight and claw his way back up.  Yeah, he's a cloner and his ideas may turn with what books he's reading, but he still uses the same fundamentals in analyzing the investments.

His fund is volatile, but his results have actually been pretty good as a manager, and he only makes money when partners make money.  Aren't there alot more (like 95%) managers more deserving of such scorn than Mohnish?

How many young fund managers has he helped?  How many investors has he helped by freely sharing his knowledge...and you know who you are...you don't invest with him, but love stealing his ideas and eating his hor d'oeurves!  How many presentations and speeches has he done...like he's not busy enough?  How many kids has he put through Dakshana into the IIT's?

There's alot more to like about Pabrai, than not like, that's for sure!  And who has the balls at his age to wear spandex when cycling (recurring joke by me)! 

Cheers!
No man is a failure who has friends!

stahleyp

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Re: Dhandho Holdings!
« Reply #148 on: July 19, 2017, 06:03:42 PM »
Sanj,

any insight as to why he doesn't want his letters to go public?
Paul

crastogi

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Re: Dhandho Holdings!
« Reply #149 on: July 19, 2017, 07:00:29 PM »
This is actually not a nice summary.  I'd like to see the dozen stocks.  I think you missed Budget bonds, which he didn't invest in, but got most of the ones and then claimed it was just the beginning.

Also, he's never closed a fund, so it is rather disingenuous to solely describe him and then mentioning closed funds.

I also refer to my previous post on this topic, which does not seem to be recognized:
Quote
Ok, so the theme seems to currently be that Pabrai's returns aren't any good since he got a lot of money.  Let's examine that a little bit.

In 2003 he had 50 million AUM.
In 2004 he had 145 million AUM. 

I'd say at least one of those years starts counting as "a lot of money".

Here are the rolling 5 year statistics for Pif2 from that point on:
60% of rolling 5 year returns are greater than the S&P 500 from 2003
55.6% of rolling 5 year returns are greater than the S&P 500 from 2004

Interestingly, there are only 4 rolling 5 year periods that are negative, and 3 of them are in the last 3 years.  So, I think it is pretty clear that this underperformance that everyone is referring to is just from the last few years, just like most other value funds out there.

The Pif3 returns are fairly similar.  Pif4, for some reason, just kind of sucks.  It has performed worse than the other funds in the same periods fairly consistently.

As I mentioned earlier, all the big value guys are sucking right now.  Why single him out so hard?

Also, he's not the same as the "helpers" Buffett is talking about--Buffett singles out 2/20 and fund of funds.  Pabrai is 25% over 6%, just like Buffett was, and has not paid himself for years at a time.

I sincerely hope you guys never screw up and have someone judge you as harshly as you are doing Pabrai right now...

+1!  As I mentioned in a post when Mohnish was hitting bottom and people were piling on him...this board, just like any other, is a reverse indicator of the future.  Since that time, his funds are up around 100%.

Yeah, he hasn't performed as well as he would like for his investors, but he's only human.  Anyone who invested with him from day one is doing as well or better than the S&P500 TR to date, with PIF2 and PIF3 outperforming by about 4% annualized and PIF4 essentially breaking even.

His interests are aligned with partners, he's had massive redemptions at the bottom on two occasions, and continues to fight and claw his way back up.  Yeah, he's a cloner and his ideas may turn with what books he's reading, but he still uses the same fundamentals in analyzing the investments.

His fund is volatile, but his results have actually been pretty good as a manager, and he only makes money when partners make money.  Aren't there alot more (like 95%) managers more deserving of such scorn than Mohnish?

How many young fund managers has he helped?  How many investors has he helped by freely sharing his knowledge...and you know who you are...you don't invest with him, but love stealing his ideas and eating his hor d'oeurves!  How many presentations and speeches has he done...like he's not busy enough?  How many kids has he put through Dakshana into the IIT's?

There's alot more to like about Pabrai, than not like, that's for sure!  And who has the balls at his age to wear spandex when cycling (recurring joke by me)! 

Cheers!

+1...  there is lot to appreciate in how he lives his life for sure.