Interview with deep value investor Monish Pabrai

[HedgefundTrader2]

Quote from QQQBALL:

the guy is a "DEEP value investor". some of you guys seem miffed that his recent buys are not rocket ships. the guy is up 600% or whatever in 8 years.

You don't know it.

These people perhaps hire PR firms that markets thems, draw publicity and eventually investors in subtle ways and they enhance their funds. They are prohibited by law to advertise in newspapers. This is a circumspect way of beating the SEC rules.
It works around evolving a GURU like figure and that nurtures a following.

Read PHIL TOWN'S book RULE #1 and become your own Guru, fish all you want and you can still peek at WARREN and Pabrais portfolios from time to time to see how things are going..

 

[QQQBALL]

Quote from day7793:

You don't know it.

These people perhaps hire PR firms that markets thems, draw publicity and eventually investors in subtle ways and they enhance their funds. They are prohibited by law to advertise in newspapers. This is a circumspect way of beating the SEC rules.
It works around evolving a GURU like figure and that nurtures a following.

Read PHIL TOWN'S book RULE #1 and become your own Guru, fish all you want and you can still peek at WARREN and Pabrais portfolios from time to time to see how things are going..

look... the guy has 600% profit since 1999. that includes the tech bubble bursting, 9/11, Gulf War II, etc. just give the guy his props and dont be a such a prick. BTW, im betting Big Phil doesnt manage money - he sells a service, program or chat room right?

 

[HedgefundTrader2]

Quote from QQQBALL:

look... the guy has 600% profit since 1999. that includes the tech bubble bursting, 9/11, Gulf War II, etc. just give the guy his props and dont be a such a prick. BTW, im betting Big Phil doesnt manage money - he sells a service, program or chat room right?

Why would anyone should be buying stocks when the market is going down? I would be shorting these clowns to death. Trading bear call spreads and buying puts on SPX and RUT, SOX.

 

[pepper_john]

Rail does not loo like a Buffet stock. The earning is erratic and hard to predict. More importantly, how often the railway companies replace their cars?

year eps
2002/12 -1.41
2003/12 -1.23
2004/12 -3.76
2005/12 4.08
2006/12 10.23


On the positive side, the company has 15 cash per share.

 

[Toro KMA]

Quote from day7793:

Three weeks ago I didn't have the book " DHANDO INVESTOR" by Mohinish Pabrai, now I do. Its a good book, deals with simple concpets and common sense arbitrage and buying businesses with durable moats.

Heads I win, tails I don't lose much, is the center theme around all chapters in the book. Fine, that is great ,sounds more like a gamblers motto than an investing insight and wisdom.

Great concepts no doubt, it should work in the long run if you have nothing better to do or invest or know about around you. Than I went to www.nasdaq.com and drilled down Mohnish Pabrai's holdings ( you find out about any public funds what they own at the site and portfolios etc in minutes).

He is invested with 300 million dollars in 15 stocks and a bunch of Berkshire Hathway class A and B shares where he is parking idle cash. BRK hasn't done a thing since 2007 and the chart is sideways. Mohnish could have bought T-Bills at5% and done better if he wasn't in such an awe, about Warren Buffet through out this year.

Take a look at the charts of RAIL, PNCL and some of his holdings some other obscure stocks that he owns. They have low P/Es and high ROE, I agree. But the stocks are in the dumpsters! Technical charts suck. There is no promise if that business will make it big. Why would you invest 2-3 years of your dollars in some doubtful business just because you bought it 50- 75 cents on the dollar when you can reap twice as much on some great running bullish stocks that pay cash divvys ?

No wonder these guys call themselves geniuses when the eek out a measely 20% returns. Heck , you can buy SPY and IWM and some bullish stocks like DO, HAL, SLB, GOOG, AAPL, AMZN, NVDA and some mutual funds and perhaps come out way way ahead. What is this buying up some junked up companies when there is so much meat on the others that you can trade your way in and out, write covered calls, and enhance your returns.

The way I look at it, I make 5-10% returns through income generation strategies consistently on a small 150 K account, my returns are astronomical compared to Pabrai Funds or BRKA this year so far ?

Would you call me a genius perhaps?

If you do it for 10 years, then yes.

 

[keyser1]

Quote from day7793:

Why would anyone should be buying stocks when the market is going down? I would be shorting these clowns to death. Trading bear call spreads and buying puts on SPX and RUT, SOX.

Because the top value investors have proven they can get 30+% annualized returns without using any leverage, and by almost never having down years. Thats why.

Because the market has temporary price innefficiencies and they've found a textbook method (yes, its actually written out in a textbook by ben graham) of beating the market handily over the long run. And they dont have to worry about losing 200% of their investment in a short sale, or a margin call wiping out their hedge fund.

 

[HedgefundTrader2]

Quote from keyser1:

Because the top value investors have proven they can get 30+% annualized returns without using any leverage, and by almost never having down years. Thats why.

Because the market has temporary price innefficiencies and they've found a textbook method (yes, its actually written out in a textbook by ben graham) of beating the market handily over the long run. And they dont have to worry about losing 200% of their investment in a short sale, or a margin call wiping out their hedge fund.

That is 30% return in one year. There are hundreds of mutual funds that have raked in 30% Plus in the last year alone. Do a search on Mutual Funds on Marketwatch and find out. Why stagger and go after CIGAR BUTT companies, when you have Rolls Royces parked outside?

I myself can produce 5-10% returns per month consistently in the options markets is that amazing or what? Its income nothing more.

 

[pepper_john]

Quote from day7793:

That is 30% return in one year. There are hundreds of mutual funds that have raked in 30% Plus in the last year alone. Do a search on Mutual Funds on Marketwatch and find out. Why stagger and go after CIGAR BUTT companies, when you have Rolls Royces parked outside?

I myself can produce 5-10% returns per month consistently in the options markets is that amazing or what? Its income nothing more.

Congratulation. You will be better than James Simons, who can only generate 39% a year.

 

[HedgefundTrader2]

Quote from pepper_john:

Congratulation. You will be better than James Simons, who can only generate 39% a year.

These two funds will generate more than 40% a year:

PRLAX
MALTX

Any questions why value investors are better than these mutual funds?

I can post 100 more funds that will deliver more than 40% returns that will beat the pants off any value investors best years. I have a slew of these in my pocket.

 

[makloda]

Quote from day7793:
I myself can produce 5-10% returns per month consistently in the options markets is that amazing or what?

Until you blow up and stop trading forever.