Mohnish Pabrai and Guy Spier on Equity Investing in Japan and Beyond

[oddballstocks]

This thread is awesome, and it really going to the point about Japanese equities.  Of the hour long presentation maybe 1m at the most was Monish talking about some pick he concentrated in.  The rest of the talk was about Japanese net-nets and how abandoned and ignored they are.

 

So what happens on the thread discussing the video?  Everyone ignores the cheap Japanese companies and focuses on the 1m segment about some 60-90% portfolio allocation.  That is a cool soundbite, but it seems everyone here just totally missed the forest for one single tree.

 

Maybe Japanese equities will never revert to the mean, they will always sell below book value, and will remain ignored forever.  I have a suspicion though that in a few years, maybe one or two, or maybe five people on this board will be talking about how they missed out on the epic run in some of these stocks.

 

Or Japan finally blows up from its debt load, and those Japanese stocks plummet in dollar terms as the yen crumbles.  Cheers!

 

Always the optimist!

 

How about we switch it around "Or the US finally blows up from their debt load and un-payable promises, these US stocks will plummet along with the dollar."  There's always risk somewhere...

[rkbabang]

And for those that believe in the idea that you dilute your returns by diversifying away from your best idea then yes, Japanese stocks aren't for you.  I also wonder how many concentrated investors walk the walk and are willing to do what Monish is going to do, go 90% in his best idea.  To me that's conviction and that's the logical end of the don't waste ideas meme.  Why go for the second idea, just pile into the first.

 

I hope him well, essentially he gets one shot with this, 90% into a company doesn't leave much room for error.  Many entrepreneurs do the same exact thing, but they can control the outcome, and influence decisions being made, I'm not sure Monish is in the same position.

 

I'm not saying I would put 90% into one idea, although I currently have more than 60% in my best idea.  In the past I've had as much as 15-20 positions.  But I'm no investing genius.  If there is a stock Mohnish Pabrai is willing to go almost all into, I'd at least like to look at it for consideration.  This isn't either/or.  You could hold this as a 5-10% position and if it returned 40X that would be a great thing, you could also hold a basket of Japanese net-nets alongside it, but you are unlikely to get a 10X return on them. 

 

I see no harm in trying to figure out what it is. However if I found out it was BYD, I'd be unlikely to invest at all, because I've tried to understand it in the past and have not felt confident enough to invest.  I don't like technology stocks, why couldn't another company come up with some better battery technology and make everything BYD does irrelevant? What is its moat?

[rijk]

 

 

Or Japan finally blows up from its debt load, and those Japanese stocks plummet in dollar terms as the yen crumbles.  Cheers!

 

you can borrow yen against your japanese holdings to cancel out the currency risk, most japanese net nets pay a decent dividend (2-4%) which should more than offset the interest expenses (currently approx 1%)

 

regards

rijk

[rjstc]

Parsad; Didn't we have a similar discussion when I brought up the interview on another thread a little while ago? If I remember correctly he said on the interview this was family money. I think that you correctly pointed out most of his current investment money is in his fund. But this was probably IRA type money. Some of it his childrens? So if that is correct he really doesn't have 90% invested in this stock. But for a long term investment that might take a while to work out it won't matter since they are not going to be pulling the money out for a while. Long term like Buffett/Munger might do? Like in BYD?

[Parsad]

Parsad; Didn't we have a similar discussion when I brought up the interview on another thread a little while ago? If I remember correctly he said on the interview this was family money. I think that you correctly pointed out most of his current investment money is in his fund. But this was probably IRA type money. Some of it his childrens? So if that is correct he really doesn't have 90% invested in this stock. But for a long term investment that might take a while to work out it won't matter since they are not going to be pulling the money out for a while. Long term like Buffett/Munger might do? Like in BYD?

 

Hi RJ,

 

I think you are correct.  Munger has a ton in BYD, thus why I'm thinking this may be it.  We'll find out eventually.  Cheers!

[PlanMaestro]

While doing some research about Portugal…

http://www.jornaldenegocios.pt/empresas/detalhe/fundos_pabrai_investment_venderam_total_da_posicao_na_sonae_capital.html

[buylowersellhigh]

While doing some research about Portugal…

http://www.jornaldenegocios.pt/empresas/detalhe/fundos_pabrai_investment_venderam_total_da_posicao_na_sonae_capital.html

 

Translation?

[meiroy]

While doing some research about Portugal…

http://www.jornaldenegocios.pt/empresas/detalhe/fundos_pabrai_investment_venderam_total_da_posicao_na_sonae_capital.html

 

Translation?

 

Google's Translate:

 

The position of about 4.3% was sold and those funds no longer hold any equity stake in the company.

Funds Pabrai Investment Fund 3 and Pabrai Investment Fund IV, sold their positions in Sonae Capital, the company said in a statement to the CMVM.

"Since 31 October 2012, the Fund Pabrai Investment Fund IV (Fund IV PIF), incorporated in the U.S. state of Delaware, sold on the stock exchange 5,194,890 shares representing approximately 2.07% of the share capital of Sonae Capital ( ...) does not hold any shares of the date Sonae Capital, "said the document.

Moreover, "Since November 30, 2012, the Fund Pabrai Investment Fund 3 Fund (PIF 3), consisting in the British Virgin Islands, sold on the stock exchange 5,624,000 shares representing 2.25% of capital of Sonae Capital, not holding the date any action of Sonae Capital. "

The statement said also that Mohnish Pabrai, natural person resident in the U.S. state of California, and Harina Kapoor, individual and resident of the State of California, are the only members of Dalal Street, the entity responsible for making all investment decisions Funds II PIF, PIF and PIF 3 IV, and shall also exercise all rights attached to the securities in which these funds invest, including the exercise of voting rights.

"In view of the above, these entities do not hold a qualifying holding of share capital and voting rights of Sonae Capital," the document concludes.

[phil_Buffett]

i think it could be BYD, Fiat or CHK.

 

i have all 3 in my Portfolio. and have for all three great expectations  :)