Mohnish Pabrai blog

[cubsfan]

This thread feels like public lynching, however, time will tell.

 

 

That's for sure.

[ScottHall]

It's only a public lynching because you guys are obsessed with stock picking. Nate has the right idea.

[Icarus]

This thread goes to show that there's more to building a successful business than a good product or in this case, good investment returns.

[oddballstocks]

This thread feels like public lynching, however, time will tell.

 

 

That's for sure.

 

For sure, 15 years isn't a long enough time period to make any conclusions on performance. We probably need to see another 10-15 years of performance through two more cycles.

[racemize]

Seriously?  His returns are quite good over various periods.  The period that he doesn't have good returns is right now. Along with just about everyone else in value.  I imagine along with a lot of the people posting in this thread.

 

Since 2010, I've been tracking this set of funds:

 

Goodhaven, FPA Capital, Longleaf, Tweedy Brown, Fairholme, Chou Opportunity, FPA Crescent, Sequoia, Yacktman, Pabrai, Arlington, Aquamarine, MPIC, Pershing Square, Baupost, Greenlight

 

You know how many are beating the market now?  Only Arlington. 

 

You know who Pabrai is beating in that group?

Goodhaven, FPA Capital, Longleaf, Fairholme, Chou Opportunity, Baupost, Greenlight

 

and he's quite close to several others in the list.

 

Should we go tell Klarman he sucks as an investor too?

[Parsad]

I have to disagree with Indirect on the whole "public lynching" thing!  Mohnish has put himself out there, so if people want to play whack-a-mole...go ahead...I get it!  You're only as good as your last game anyways...we all know this.  So let me put the noose around a few people as well, since I can also post on here. 

 

Yeah, yeah, I know...most of you guys are straight up geniuses who have made considerable wealth for yourselves with no help from anyone.  The true vestiges of Ben Graham, sitting around a round table like the knights of King Arthur! 

 

Continue your mud flinging under anonymity.  Half of you like going to the Pabrai Fund meetings for the free food and potential clients you may pick up...might not get an invite if he knew your real names.

 

Last week it was Francis Chou who was being lynched.  This week Pabrai.  Maybe me, next week!

 

- How many of you give back to other investors in the way Francis or Mohnish do? 

- When Francis stays till midnight at our dinner answering your questions, how many of you do that? 

- When Mohnish invites you to his dinner instead of a potential client, how many of you do that?

 

These guys aren't Gods...which I think I've said numerous times on this message board, but people.  Good people at that!  And I know that doesn't mean much when weighing performance over certain periods, but it does mean something...or it at least should.

 

Do they make mistakes?  F**k yeah!  But I think you guys generally float with the wind when it comes to assessing their abilities as investment managers.  If they blow out the lights for a couple of years...they can do no wrong.  If they under-perform in one of the longest bull markets in 50 years, then they are incompetent.  There's no middle ground for you!

 

Alot of you bought FFH, BAC, FMG, FNM, FIAT, GM, etc when Mohnish bought them and talked about them.  No complaints then!  Then you went and bought DFC or ZINC...suddenly he's an idiot.

 

And yes, he's a marketing machine...one of the best in the investment industry...but he was killing it as an investment manager as he built those assets under management.  He had $500M under management in April of 2007...after compounding at +28.7% annualized for 7 years with no down year.  How was he deceptive?  How was he an average investor?

 

Alot of managers have gotten the shit kicked out of them over the last 8 years.  Or have barely outperformed, slightly trailed...you name it.  But very few remain compensated solely on an incentive fee alone like Pabrai! 

 

So go ahead...take your swings.  Time will tell if Pabrai is good or really a poser.  In the meantime:

 

- He would have put more kids through the IIT's

- Taken time to meet more young investment managers starting out

- Continued to spread the gospel of Graham, Buffett & Munger

- Write two more books

- Lecture at a few more universities

- Launch Dhandho's IPO

- And continue to let Spandex creep up his ass crack as he rides his bike

 

All the while, you'll still be sitting here talking about what an ass Pabrai is and what a loser of a money manager he is.  Talk about asses and losers!  Cheers! 

 

 

 

 

[Parsad]

Seriously?  His returns are quite good over various periods.  The period that he doesn't have good returns is right now. Along with just about everyone else in value.  I imagine along with a lot of the people posting in this thread.

 

Since 2010, I've been tracking this set of funds:

 

Goodhaven, FPA Capital, Longleaf, Tweedy Brown, Fairholme, Chou Opportunity, FPA Crescent, Sequoia, Yacktman, Pabrai, Arlington, Aquamarine, MPIC, Pershing Square, Baupost, Greenlight

 

You know how many are beating the market now?  Only Arlington. 

 

You know who Pabrai is beating in that group?

Goodhaven, FPA Capital, Longleaf, Fairholme, Chou Opportunity, Baupost, Greenlight

 

and he's quite close to several others in the list.

 

Should we go tell Klarman he sucks as an investor too?

 

+1! 

 

Klarman will be next week...the board just needs some time.  Then we'll have a bonfire of copies of Dhandho, Mosaic and Margin of Safety.  Cheers!

[DooDiligence]

I have to disagree with Indirect on the whole "public lynching" thing!  Mohnish has put himself out there, so if people want to play whack-a-mole...go ahead...I get it!  You're only as good as your last game anyways...we all know this.  So let me put the noose around a few people as well, since I can also post on here. 

 

Yeah, yeah, I know...most of you guys are straight up geniuses who have made considerable wealth for yourselves with no help from anyone.  The true vestiges of Ben Graham, sitting around a round table like the knights of King Arthur! 

 

Continue your mud flinging under anonymity.  Half of you like going to the Pabrai Fund meetings for the free food and potential clients you may pick up...might not get an invite if he knew your real names.

 

Last week it was Francis Chou who was being lynched.  This week Pabrai.  Maybe me, next week!

 

- How many of you give back to other investors in the way Francis or Mohnish do? 

- When Francis stays till midnight at our dinner answering your questions, how many of you do that? 

- When Mohnish invites you to his dinner instead of a potential client, how many of you do that?

 

These guys aren't Gods...which I think I've said numerous times on this message board, but people.  Good people at that!  And I know that doesn't mean much when weighing performance over certain periods, but it does mean something...or it at least should.

 

Do they make mistakes?  F**k yeah!  But I think you guys generally float with the wind when it comes to assessing their abilities as investment managers.  If they blow out the lights for a couple of years...they can do no wrong.  If they under-perform in one of the longest bull markets in 50 years, then they are incompetent.  There's no middle ground for you!

 

Alot of you bought FFH, BAC, FMG, FNM, FIAT, GM, etc when Mohnish bought them and talked about them.  No complaints then!  Then you went and bought DFC or ZINC...suddenly he's an idiot.

 

And yes, he's a marketing machine...one of the best in the investment industry...but he was killing it as an investment manager as he built those assets under management.  He had $500M under management in April of 2007...after compounding at +28.7% annualized for 7 years with no down year.  How was he deceptive?  How was he an average investor?

 

Alot of managers have gotten the shit kicked out of them over the last 8 years.  Or have barely outperformed, slightly trailed...you name it.  But very few remain compensated solely on an incentive fee alone like Pabrai! 

 

So go ahead...take your swings.  Time will tell if Pabrai is good or really a poser.  In the meantime:

 

- He would have put more kids through the IIT's

- Taken time to meet more young investment managers starting out

- Continued to spread the gospel of Graham, Buffett & Munger

- Write two more books

- Lecture at a few more universities

- Launch Dhandho's IPO

- And continue to let Spandex creep up his ass crack as he rides his bike

 

All the while, you'll still be sitting here talking about what an ass Pabrai is and what a loser of a money manager he is.  Talk about asses and losers!  Cheers!

 

I think I have a man crush on you (nothing homo erotic; more of a Siddhartha kind of thing!)

[Jurgis]

So according to Sanjeev if someone is a well known nice value guy, people should only post fawning messages about them...  ::)

 

Cause otherwise it's public lynching man.

 

I think you don't know what public lynching is and comparing a board discussion to one is rather distasteful.

[Parsad]

So according to Sanjeev if someone is a well known nice value guy, people should only post fawning messages about them...  ::)

 

Cause otherwise it's public lynching man.

 

I think you don't know what public lynching is and comparing a board discussion to one is rather distasteful.

 

I said I disagreed that it was a public lynching on the very first line of the post.  I compared it as mud-flinging.  Cheers!

[Parsad]

I have to disagree with Indirect on the whole "public lynching" thing!  Mohnish has put himself out there, so if people want to play whack-a-mole...go ahead...I get it!  You're only as good as your last game anyways...we all know this.  So let me put the noose around a few people as well, since I can also post on here. 

 

Yeah, yeah, I know...most of you guys are straight up geniuses who have made considerable wealth for yourselves with no help from anyone.  The true vestiges of Ben Graham, sitting around a round table like the knights of King Arthur! 

 

Continue your mud flinging under anonymity.  Half of you like going to the Pabrai Fund meetings for the free food and potential clients you may pick up...might not get an invite if he knew your real names.

 

Last week it was Francis Chou who was being lynched.  This week Pabrai.  Maybe me, next week!

 

- How many of you give back to other investors in the way Francis or Mohnish do? 

- When Francis stays till midnight at our dinner answering your questions, how many of you do that? 

- When Mohnish invites you to his dinner instead of a potential client, how many of you do that?

 

These guys aren't Gods...which I think I've said numerous times on this message board, but people.  Good people at that!  And I know that doesn't mean much when weighing performance over certain periods, but it does mean something...or it at least should.

 

Do they make mistakes?  F**k yeah!  But I think you guys generally float with the wind when it comes to assessing their abilities as investment managers.  If they blow out the lights for a couple of years...they can do no wrong.  If they under-perform in one of the longest bull markets in 50 years, then they are incompetent.  There's no middle ground for you!

 

Alot of you bought FFH, BAC, FMG, FNM, FIAT, GM, etc when Mohnish bought them and talked about them.  No complaints then!  Then you went and bought DFC or ZINC...suddenly he's an idiot.

 

And yes, he's a marketing machine...one of the best in the investment industry...but he was killing it as an investment manager as he built those assets under management.  He had $500M under management in April of 2007...after compounding at +28.7% annualized for 7 years with no down year.  How was he deceptive?  How was he an average investor?

 

Alot of managers have gotten the shit kicked out of them over the last 8 years.  Or have barely outperformed, slightly trailed...you name it.  But very few remain compensated solely on an incentive fee alone like Pabrai! 

 

So go ahead...take your swings.  Time will tell if Pabrai is good or really a poser.  In the meantime:

 

- He would have put more kids through the IIT's

- Taken time to meet more young investment managers starting out

- Continued to spread the gospel of Graham, Buffett & Munger

- Write two more books

- Lecture at a few more universities

- Launch Dhandho's IPO

- And continue to let Spandex creep up his ass crack as he rides his bike

 

All the while, you'll still be sitting here talking about what an ass Pabrai is and what a loser of a money manager he is.  Talk about asses and losers!  Cheers!

 

I think I have a man crush on you (nothing homo erotic; more of a Siddhartha kind of thing!)

 

No worries!  I feel the same way about Prem.  ;D  Cheers!

[petec]

 

- And continue to let Spandex creep up his ass crack as he rides his bike

 

 

Not the mental picture I needed over breakfast ;)

[Patmo]

I have no dog in this fight, but why the hell are you people removing X year from his returns because it was a good year for everybody? Why don't you remove the bad years while you're at it, as well as leap years and the year he launched his book. You should also add an extra 15% on the year his dog died.

 

Make judgements about the dudes record all you want, but his record starts at year Y and finishes at year Z. You dont get to cherrypick which year in the set "counts" based off the weather on that day...

 

Sideline rant over and out, enjoy your day my fellows

[DooDiligence]

 

- And continue to let Spandex creep up his ass crack as he rides his bike

 

 

Not the mental picture I needed over breakfast ;)

 

Uhhhhhh; can't find where Parsad said that anywhere.

 

Am I missing something or was that quote altered?

[augustabound]

 

- And continue to let Spandex creep up his ass crack as he rides his bike

 

 

Not the mental picture I needed over breakfast ;)

 

Uhhhhhh; can't find where Parsad said that anywhere.

 

Am I missing something or was that quote altered?

 

Control f to search spandex. It's the last line in his post.

[DooDiligence]

 

Uhhhhhh; can't find where Parsad said that anywhere.

 

Am I missing something or was that quote altered?

 

Control f to search spandex. It's the last line in his post.

 

I read kinda fast & have found in the past that I actually skip over certain things unconsciously.

 

Now if he would've said "her ass" then it probably would have made it through the filter.

 

Paradoxically; my "man crush" comment still stands...

[Jurgis]

I compared it as mud-flinging.  Cheers!

 

I disagree that it is mud flinging. IMO it is mostly normal discussion about hedge fund manager, his methods, his ideas and his performance. Sure, sometimes people are not wearing kiddie gloves, but I don't think they are being nasty or hateful on purpose.

 

Anyway, to protect Sanjeev from high blood pressure and stress, I decided not to express opinions about some known value investors.

 

Cheers! ;)

[Travis Wiedower]

I have no dog in this fight, but why the hell are you people removing X year from his returns because it was a good year for everybody? Why don't you remove the bad years while you're at it, as well as leap years and the year he launched his book. You should also add an extra 15% on the year his dog died.

 

Make judgements about the dudes record all you want, but his record starts at year Y and finishes at year Z. You dont get to cherrypick which year in the set "counts" based off the weather on that day...

 

Sideline rant over and out, enjoy your day my fellows

 

+1. It's not fair to discount years when *everyone* outperforms (2000-2007) and only focus on years when *everyone* underperforms (2010-2015).

[oddballstocks]

I have no dog in this fight, but why the hell are you people removing X year from his returns because it was a good year for everybody? Why don't you remove the bad years while you're at it, as well as leap years and the year he launched his book. You should also add an extra 15% on the year his dog died.

 

Make judgements about the dudes record all you want, but his record starts at year Y and finishes at year Z. You dont get to cherrypick which year in the set "counts" based off the weather on that day...

 

Sideline rant over and out, enjoy your day my fellows

 

The issue is this: he started with a few million bucks and had incredible performance.  Most of the initial money was his own.  On the back of that performance he raised a TON of money.  That new money has under performed the indexes.  This is called a money weighted return.  His money weighted returns are poor.  This is typical of most fund managers.  They have a strategy that does well with small sums but fails to scale.

 

The other issue is he is keeping alive the myth that he's compounded at 20% a year for 10 years plus.  Yet that's not true, his performance isn't anywhere near that.  Yet he does nothing to clarify the myth, he just lets it grow.

 

I think the hero worship is overdone.  He's just a guy.  He had good ideas with smaller money, he's had trouble scaling.  Maybe he'll bounce back, who knows. 

 

My own view is he's a brilliant business-person.  He started with $0 and created $40+m of wealth for himself.  If clients are dissatisfied they can leave, and some have. 

 

Regarding Klarman, his performance sucked for years as well, in the absolute gutter.  In 2000 $50k invested in his fund for 10 years had turned into $169k verses $273k in the S&P.  By 2007 he was up 337% over the past 10 years compared to 77% for the S&P.  He made ALL of his returns on the back of the 2000 crash.  But it's worth noting his style changed too.  As assets and the market changed he changed as well, and eventually found a formula that worked.  In 2007 he was 50% in cash going into the crash, he took advantage again by minimizing losses and then being able to scoop up bargains further juicing returns.

 

I was partially joking and partially not about Pabrai's next 15 years of performance.  Maybe he'll discover a formula that works for him.  It took Klarman 10 years of under performance before he hit his stride.

 

A lot of these guys have this myth that they're investing super-heros.  And they keep their performance secret.  Yet when you see the numbers the myth is shattered in a lot of cases.  Another bone to pick I have is with managers who only release their letters and performance in good years.

 

I will credit Pabrai for not shutting down and starting a new fund.  That's the bottom of the barrel in my mind.

 

 

[Icarus]

The issue is this: he started with a few million bucks and had incredible performance.  Most of the initial money was his own.  On the back of that performance he raised a TON of money.  That new money has under performed the indexes.  This is called a money weighted return.  His money weighted returns are poor.  This is typical of most fund managers.  They have a strategy that does well with small sums but fails to scale.

 

+1

 

Pabrai's results leave more to be desired, but I do give him props for trying to generate alpha with his unconventional stock picks.  There are some fund managers who become closet indexers after they beat the market in the early years.

[racemize]

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.

 

[Steven B]

I have no dog in this fight, but why the hell are you people removing X year from his returns because it was a good year for everybody? Why don't you remove the bad years while you're at it, as well as leap years and the year he launched his book. You should also add an extra 15% on the year his dog died.

 

Make judgements about the dudes record all you want, but his record starts at year Y and finishes at year Z. You dont get to cherrypick which year in the set "counts" based off the weather on that day...

 

Sideline rant over and out, enjoy your day my fellows

 

The issue is this: he started with a few million bucks and had incredible performance.  Most of the initial money was his own.  On the back of that performance he raised a TON of money.  That new money has under performed the indexes.  This is called a money weighted return.  His money weighted returns are poor.  This is typical of most fund managers.  They have a strategy that does well with small sums but fails to scale.

 

The other issue is he is keeping alive the myth that he's compounded at 20% a year for 10 years plus.  Yet that's not true, his performance isn't anywhere near that.  Yet he does nothing to clarify the myth, he just lets it grow.

 

I think the hero worship is overdone.  He's just a guy.  He had good ideas with smaller money, he's had trouble scaling.  Maybe he'll bounce back, who knows. 

 

My own view is he's a brilliant business-person.  He started with $0 and created $40+m of wealth for himself.  If clients are dissatisfied they can leave, and some have. 

 

Regarding Klarman, his performance sucked for years as well, in the absolute gutter.  In 2000 $50k invested in his fund for 10 years had turned into $169k verses $273k in the S&P.  By 2007 he was up 337% over the past 10 years compared to 77% for the S&P.  He made ALL of his returns on the back of the 2000 crash.  But it's worth noting his style changed too.  As assets and the market changed he changed as well, and eventually found a formula that worked.  In 2007 he was 50% in cash going into the crash, he took advantage again by minimizing losses and then being able to scoop up bargains further juicing returns.

 

I was partially joking and partially not about Pabrai's next 15 years of performance.  Maybe he'll discover a formula that works for him.  It took Klarman 10 years of under performance before he hit his stride.

 

A lot of these guys have this myth that they're investing super-heros.  And they keep their performance secret.  Yet when you see the numbers the myth is shattered in a lot of cases.  Another bone to pick I have is with managers who only release their letters and performance in good years.

 

I will credit Pabrai for not shutting down and starting a new fund.  That's the bottom of the barrel in my mind.

 

Not to revive a dead thread (although I am), I agree with most of Oddball's comments save for the Klarman stuff. I'm pretty sure Klarman's uptick in returns weren't purely because of a "style" change. Sure he was evolving as an investor and always kept searching for less efficient markets but I think if you read his letters from the late 90's (http://www.safalniveshak.com/wp-content/uploads/2012/09/Seth-Klarman-Baupost-Group-Letters.pdf) it's clear that he believed in his strategy and that eventually value would recover.

[flesh]

Anyone notice in the latest talk at a chinese university (2016) he said my returns through 2014 are xxxxxx. If leaving a horrid year out once that year is over for months isn't indicative of whom you are dealing with, I don't know what is. Integrity isn't about what you're like when it's easy, but when it's hard.

 

I'm not taking the higher ground here, it takes one to know one, I've been working on this myself a lot lately, u know, marginal grey area lies. All that said, while he isn't perfect, for all I know he could have more integrity than average, but it's clear he's not all the way there yet. Misrepresenting your returns as a fund manager is NOT a grey area IMO.

[AzCactus]

Anyone notice in the latest talk at a chinese university (2016) he said my returns through 2014 are xxxxxx. If leaving a horrid year out once that year is over for months isn't indicative of whom you are dealing with, I don't know what is. Integrity isn't about what you're like when it's easy, but when it's hard.

 

I'm not taking the higher ground here, it takes one to know one, I've been working on this myself a lot lately, u know, marginal grey area lies. All that said, while he isn't perfect, for all I know he could have more integrity than average, but it's clear he's not all the way there yet. Misrepresenting your returns as a fund manager is NOT a grey area IMO.

 

+1

[flesh]

 

I apologize I don't know where it is as I watched it a month or so ago. Someone else had posted a link.