Author Topic: Mohnish Pabrai blog  (Read 106396 times)

Saluki

  • Full Member
  • ***
  • Posts: 159
Re: Mohnish Pabrai blog
« Reply #260 on: July 19, 2019, 06:24:32 AM »
Wow I'm surprised these are his results. I thought it would be a lot better.

I remember watching one of his lectures where he says he only buys stocks that go up 2x/3x in 3 years.

 :o

Well, due to the randomness of the stock market (and life) it's hard to judge if a person is doing something right by the outcome, you have to look at the process.  I thought his long term performance would be better, but I still enjoy and learned a lot from his videos.  For example, the Blue Chip Stamps video lecture (few bets, big bets) was very informative.  I learned about Blue Chip because the case was studied in law school (can't favor one group of shareholders over another) and a little more about it in the Snowball, but that video filled in all the missing pieces. 

I think his videos and books are a help to investors to learn the process he goes through and what he looks for. Someone could have way better results by "following my gut" but that won't help me because 1) the results might be just luck and you'll never know if they don't show the process and 2) if it's not teachable then it can't be repeatable, so it won't help me.

But I'm probably biased.  When I met Mohnish I asked him to autograph my copies of both his books.  #fanboy
If it's important, do it every day. If it's not important, don't do it at all.  -Dan Gable


investmd

  • Full Member
  • ***
  • Posts: 135
Re: Mohnish Pabrai blog
« Reply #261 on: July 19, 2019, 06:53:59 AM »
Sanj,

Shouldn't 15+ years be enough time to outperform? This includes a full market cycle (and more).

I'd guess that if you looked at PIF2 and PIF3  since 2003, they would have also unperformed (though I certainly can be wrong about that).

With that said, I do enjoy watching his talks and I like that he didn't close his fund when performance was bad just to reopen another one.
Stahleyp: Completely agree that 15 years and probably even 10 years is enough to judge results. The numbers are adequate but do not show significant outperformance. I respectfully disagree with Prasad's comment about where in the cycle one is - over 10 & 15 years there should be enough ups and downs to balance.

However, what I really do like about Pabrai is that it looks like he genuinely tries to learn from mistakes (checklist he develops) and admits them. Can't learn and avoid it next time, if you don't admit it was a mistake.

In summary, over long periods of time the Fund has not lost money for investors and  has marginally outperformed the market. As Pabrai says he is a better investor today than he ever has been. Looks like a great time to be invested in the Fund. Hopefully, Prasad's comments about outperformance over the next 3-5 years are on the mark.

eclecticvalue

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 572
Re: Mohnish Pabrai blog
« Reply #262 on: July 19, 2019, 07:34:21 AM »
I think he needs some outside help and I am sure there will be many people who would like to work for him.

EricSchleien

  • Sr. Member
  • ****
  • Posts: 357
Re: Mohnish Pabrai blog
« Reply #263 on: July 19, 2019, 08:32:46 AM »
Here are some thoughts I have about this.

If you look at the worst-performing stocks they have been "deep value". Here's an interesting blog post that a close friend of mine shared with me that goes deeper into that: https://alphaarchitect.com/2019/07/18/value-investing-concentration/?fbclid=IwAR00KS1q4Y0dTbJarvhZJy2KFQO4sFaQtnAboNCisdXMsRdcC0Tr_RZYOBE

Furthermore, Pabrai has been heavily concentrated in India which hasn't done so well recently.

When you take into account that we've had a much longer than average bull market + longer than average growth stocks (by valuation metric) outperforming lower p/e, p/b stocks as well as non-indexed companies underperforming companies traded on an index - you could say Pabrai has been invested in one of the worst sectors of the stock market over the past 10 years (deep value, non-indexed companies) and now recently in Indian securities.

So I believe this is one of those times where it may be the absolute worst time to measure how good he is over results alone based off what I shared above.

Also - the fact that he's kept up with the market while investing in some of the worst-performing segments of the stock market over the past decade says a lot as well.

Of course, only time will tell.

coc

  • Full Member
  • ***
  • Posts: 204
Re: Mohnish Pabrai blog
« Reply #264 on: July 19, 2019, 01:11:19 PM »
If you’re going to discount periods in which “value” is not performing as well as you deem appropriate, you’d have to also take out the periods in which “value” performed better than it should have - if you’re going to be intellectually honest. Right?

And if someone has a track record covering multiple “cycles” of good and bad, when are you allowed to judge their performance?

It’s sort of like companies that blame the weather for their performance. Have you ever seen them discount their good performance due to unusually good weather?

mcliu

  • Hero Member
  • *****
  • Posts: 556
Re: Mohnish Pabrai blog
« Reply #265 on: July 19, 2019, 01:29:59 PM »
Wow I'm surprised these are his results. I thought it would be a lot better.

I remember watching one of his lectures where he says he only buys stocks that go up 2x/3x in 3 years.

 :o

Well, due to the randomness of the stock market (and life) it's hard to judge if a person is doing something right by the outcome, you have to look at the process.  I thought his long term performance would be better, but I still enjoy and learned a lot from his videos.  For example, the Blue Chip Stamps video lecture (few bets, big bets) was very informative.  I learned about Blue Chip because the case was studied in law school (can't favor one group of shareholders over another) and a little more about it in the Snowball, but that video filled in all the missing pieces. 

I think his videos and books are a help to investors to learn the process he goes through and what he looks for. Someone could have way better results by "following my gut" but that won't help me because 1) the results might be just luck and you'll never know if they don't show the process and 2) if it's not teachable then it can't be repeatable, so it won't help me.

But I'm probably biased.  When I met Mohnish I asked him to autograph my copies of both his books.  #fanboy

I think the market randomness is only over the short-run. So you can have a great process and underperform in a year or two or five. But how do you reconcile a great investment process with underperformance over a 15 year period?

Berkshire has outperformed S&P since 2003 and that's with way more capital..