Mohnish Pabrai (Dalal Street) 13F HR

[nikhil25]

Looks like he is raising cash, or are there some new bigger foreign holdings?

 

No ideas, I haven't heard anything mentioned. But next Q it will be interesting to see what % of the portfolio is Fiat.

 

Minutes from the AGM session has that information on Page 96:

http://www.fcagroup.com/en-US/investor_relations/shareholders/FiatDocuments/FIAT_verbale_straordinaria_ENG_con_allegati.pdf

 

Seems like he has a pretty significant stake through Pabrai funds, Dakshana foundation and his own/family's investment/IRA accounts.

 

[peter1234]

Looks like he is raising cash, or are there some new bigger foreign holdings?

 

No ideas, I haven't heard anything mentioned. But next Q it will be interesting to see what % of the portfolio is Fiat.

 

At the time of the merger vote in August 2014 he disclosed about 14M Fiat shares across his various funds.

At today's price this would amount to about $160M.

;)

[LC]

Ah yes I remember now seeing the shareholder list a few months back. I can confirm the ~14m shares. Not sure how much Mohnish controls in total, but his latest 13F was about $330m, obviously not including the foreign shares he owns. Maybe $750m, Fiat representing about a 20% stake. Buy a few Maseratis, Mohnish! :)

[peter1234]

Any idea are his GM warrants expiring 2016 or 2019?

 

Warrant B (CUSIP 37045V126) on any trading day until July 10, 2019

 

;)

[vishmitt]

For people tracking Pabrai -

 

http://economictimes.indiatimes.com/et-now/experts/aware-of-the-intrinsic-value-of-all-invsts-made/videoshow/45686622.cms

 

1. 55% of Assets in 3 stocks -  Fiat/ Chrysler, GM Shares and Warrants, Horsehead Holdings

 

2. 13% of Assets in Indian Equities (coming from India, all 3 are average business at cheap prices)

 

Cheers

[peter1234]

For people tracking Pabrai -

 

http://economictimes.indiatimes.com/et-now/experts/aware-of-the-intrinsic-value-of-all-invsts-made/videoshow/45686622.cms

 

1. 55% of Assets in 3 stocks -  Fiat/ Chrysler, GM Shares and Warrants, Horsehead Holdings

 

2. 13% of Assets in Indian Equities (coming from India, all 3 are average business at cheap prices)

 

Cheers

 

Thank you. Very good interview.

:)

[Guest notorious546]

http://www.msn.com/en-us/money/taxes/treasure-island-puerto-rico-bids-to-become-new-age-tax-haven/ar-AA9fyRf

 

pabrai says a few things. more tax related than investment related though

[Guest notorious546]

Does anyone have a pdf copy of his two articles? I see them on the street.com but you need a subscription.

 

“The danger in Buying the Biggest” and “What Warren Buffett can Teach Microsoft”

[Guest notorious546]

Mohnish Pabrai has made two things very clear about his investment philosophy. First, he is not interested in a stock which does not offer potential 2x or 3x returns in a couple of years. Second, he is not interested in risking his capital. He expects his stocks to have a high margin of safety.

 

Mohnish’s earlier three stock picks, South Indian Bank, J&K Bank and GIC Housing, live up to these expectations. They are presently quoting at reasonable valuations and offer the potential of hefty gains when the economy improves and interest rates are slashed.

 

Mohnish’s latest stock pick, Rain Industries, is in the same mould. Today, his fund, The Pabrai Investment Fund II LLP, bought 26,64,000 shares of Rain Industries at Rs. 34.52 each, laying out an investment of Rs. 9.20 crore.

 

Rain Industries is a Hyderabad-based small cap with a market capitalisation of Rs. 1,155 crore. It is engaged in the manufacture of calcined petroleum coke (CPC) and cement. It is the world’s largest manufacturer of CPC with ~14% share of the global market (excl. China). CPC is consumed primarily by the Aluminium and Titanium Dioxide Industries. It also has a cement division.

 

Rain Industries has not been doing well in the recent past. Its sales and profit growth have been sluggish. It reported a loss in the December 2014 quarter. It also has high debt on the books.

 

The stock has grossly under-performed by returning a loss of 10% on a YOY basis. It, however, offers a dividend yield of nearly 3%.

 

To understand what attracted Mohnish Pabrai to Rain Industries, we have to turn to the brilliant analysis by Parry Pasricha at Beyond Proxy. http://www.beyondproxy.com/rain-industries-ltd/

 

Parry Pasricha’s research report is a textbook example of how to research a company. It delves into meticulous detail into all aspects of the company’s working and lays bare all the positive and negative factors. The report is also written with utmost clarity of expression.

 

Parry Pasricha has listed out several factors which he claims “combine for an inordinately cheap valuation and attractive risk/reward opportunity”. He further emphasizes that “Rain is a potential “triple play” – essentially you’re buying a quality business, trading at a depressed valuation, and one that is operated by a competent and well-aligned management team – providing several avenues for capital appreciation.”

 

What has appealed to Parry is the fact that Rain Industries is operating in an oligopolistic business with high entry barriers, and that it is quoting at trough earnings (P/E of 2.7x and EV/EBITDA multiple of 5.1x). He adds that Rain Industries has a well-aligned management team with a track record of prudent capital allocation.

 

At the end of the comprehensive analysis, Parry concludes that Rain Industries real worth is about ₨. 177 per share which translates to 4.9x the current market price of about ₨. 34 per share. He emphasizes that this valuation does not include any future capacity growth, upside for margin expansion, increases in sales price, or value for the tax shield provided by the company’s current debt levels and adds that “It is rare to find this level of mispricing in a business without assuming exponential growth rates or indefinite periods of peak profitability”.

 

Parry Pasricha further states that even assuming that all his assumptions go haywire and one has to adopt the “Tight Margin” scenario across all business segments, Rain Industries is still worth about ₨. 72 per share which is an upside of about 80% from the current price.

 

The result is that in buying Rain Industries, there is little downside and huge upside, Parry concludes.

 

Well, if Mohnish Pabrai does get a 4-Bagger out of Rain Industries, he will have to give Parry Pasricha a pat on the back for the brilliant analysis.

 

http://rakesh-jhunjhunwala.in/mohnish-pabrais-latest-stock-pick-is-a-potential-4-bagger-with-little-downside/

[simplefocus]

Could part of the reason for the misprice be related to Indian Stock Markets are not opened to non-Indians?

[muscleman]

Why buying BRK.B right now? Is that a defensive move?

I can't see the reason behind it...........

[Guest 50centdollars]

Why buying BRK.B right now? Is that a defensive move?

I can't see the reason behind it...........

 

He has said before that he sometimes uses BRK stock as his cash position. In other words, instead of holding cash, he just buys BRK.

[Travis Wiedower]

Could part of the reason for the misprice be related to Indian Stock Markets are not opened to non-Indians?

 

Not that I've placed an order but it appears I can buy RAIN through IB. Am I missing something?

[mani2304]

I am not sure you can buy in Interactive brokers and to buy Indian securities,India has placed so many restrictions  especially for  Non Resident Indians or Foreign citizens.

[Travis Wiedower]

Yeah I did a little more research. Definitely a challenge for individuals to invest there. It seems foreign investment managers can apply to invest in India if they have >20 clients and no one client has >49% of AUM.

[augustabound]

Why buying BRK.B right now? Is that a defensive move?

I can't see the reason behind it...........

 

He has said before that he sometimes uses BRK stock as his cash position. In other words, instead of holding cash, he just buys BRK.

 

I remember reading a year or two ago that he said it was a mistake to hold BRK as cash. Something like, in times of distress everything goes down. Now he just holds the cash.

He said something like, he'd be interested in BRK only after a big drop and that he has the same requirements to buy BRK as any other stock.

[Jurgis]

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

[racemize]

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

 

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. 

 

augustabound--I have the same recollection. 

 

Moreover, his BRK stake is so small relative to AUM, I'm not sure it is worth discussing, honestly.

[Jurgis]

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

 

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. 

 

Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper.

 

Whether it's worth paying 1.4X is something people have to decide for themselves. :)

[gfp]

I realize it is way off topic here, but why is there a rather hard floor at 1.3x?

 

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

 

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. 

 

Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper.

 

Whether it's worth paying 1.4X is something people have to decide for themselves. :)

[Mephistopheles]

I realize it is way off topic here, but why is there a rather hard floor at 1.3x?

 

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

 

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. 

 

Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper.

 

Whether it's worth paying 1.4X is something people have to decide for themselves. :)

 

I think he means the share repurchase program, but that is at 1.2x BVPS, not 1.3. So the hard floor, if it exists, would be 1.2.

[Jurgis]

I realize it is way off topic here, but why is there a rather hard floor at 1.3x?

 

This is possibly OT, but BRK is getting to be somewhat attractive. Stock has gone nowhere for over half year, while there was HNZ/KRFT deal and overall business growth.

 

Unless BVPS has gone up significantly last quarter, it is still sporting one of the highest multiples it has had in recent memory. 

 

Somewhere at 1.4X range, we'll see more precisely at Q1. I did not adjust for HNZ/KRFT. It's not very cheap, but considering a rather hard floor at 1.3, it's possibly unlikely that one can get BRK much cheaper.

 

Whether it's worth paying 1.4X is something people have to decide for themselves. :)

 

I think he means the share repurchase program, but that is at 1.2x BVPS, not 1.3. So the hard floor, if it exists, would be 1.2.

 

OK, let's go with 1.2 as easier shortcut.  8)

[AJB96]

The latest 13F from the Pabrai Funds is out:

 

http://www.sec.gov/Archives/edgar/data/1549575/000154957515000004/xslForm13F_X01/infotable.xml

 

http://whalewisdom.com/filer/dalal-street-llc

 

http://www.dataroma.com/m/holdings.php?m=PI

 

Sold:

 

All of BAC and BRK

Most of Citi and a small portion of FCAU

 

 

Bought:

 

Repurchased his Posco stake

General Motors warrants

and added to WLRH

 

[benchmark]

The latest 13F from the Pabrai Funds is out:

 

http://www.sec.gov/Archives/edgar/data/1549575/000154957515000004/xslForm13F_X01/infotable.xml

 

http://whalewisdom.com/filer/dalal-street-llc

 

Sold:

 

All of BAC and BRK

Most of Citi and a small portion of FCAU

 

 

Bought:

 

Repurchased his Posco stake

General Motors warrants

and added to WLRH

 

Interesting that he sold all BRKB (which Munger specifically said that he instructed his heirs never do) and BAC (which Bruce B still holds a large position) -- different perspective from different value investors :)

[tombgrt]

Munger's heirs might not be as talented investors as Pabrai.

 

 

Can someone explain this better:

 

How do you think about position sizing and holding cash today,

and has this changed since you wrote “The Dhando Investor”?

I start by deciding the biggest position I’m willing to take, which is

typically 10% of assets. Then for the first 75% of my investments I’ll

look for things that can double (2x) within 2-3 years, i.e. things that

are 50 cents on the dollar. Then for the next 10% or so I’ll look for

3x opportunities, and the next 5% in 4x and then the next 5% is 5x

and the final 5% has to be more than 5x. You will naturally get to the

point where you are holding lots of cash because it’s hard to find

opportunities that will become 3x or greater. That’s how I

 

Why isn't he simply trying to be buy the best value (defined as expected risk adjusted returns) regardless of the cash he has left? He seems to imply that higher potential returns correlate with higher risk while in practice it can often be the other way around. (A bit in the same league as saying that volatility equals risk, while it's often more an indicator of opportunity that can provide return.) I'm probably misreading what he meant though.