Jump to content

Pabrai Funds Rebound 50% in 1st Half 2009!


Parsad

Recommended Posts

Mohnish had a very tough year and a half from October 2007 to March 2009, but all three of his funds bounced back tremendously in the last three months.  Every Pabrai Fund was up over 50% for the last quarter, and they are all up at least 49% for 1st half of 2009. 

 

He also had his lunch with Munger on June 9th, and it was longer than his lunch with Buffett...the Munger Lunch lasted 3 hours and 17 minutes!  I'm guessing someone kept time!  ;D

 

Here's a terrific quote from his letter:

 

I feel incredibly blessed. I happen to be alive when my heroes are alive. Neither lives very

far from me. And one of them was willing to accept a bribe to meet up and share a meal.

The second one cannot be bribed, but agreed to while away an afternoon with me anyway.

Lunch with Warren and Charlie will always rank highly on my list of amazing experiences life

has dealt me. The boy born in Bandra in Mumbai never expected life to turn out so well.

 

Cheers!

Link to comment
Share on other sites

I would chose another terrific quote from his letter:

 

"this ten year record includes a long list of mistakes of commission over the decade. It is too painful to list them all here"

 

Perhaps understandably, this board's manager (Parsad) was a bit 'unhappy' in seeing criticism towards Pabrai creeping into this board, but Pabrai shows superb character with this 'only-human' admission.

 

I remember a similarly 'only-human' line from Bob Olstein's Tenth Anniversary letter:

 

"After 30 years of experience, each time the portfolio declines, my stomach still feels some pain."

 

Wishing Pabrai best of luck...

Link to comment
Share on other sites

After some bad blowups (DFC) and a supposed change in his investment style towards less concentration, what are people's thoughts towards Pabrai and his funds now?  He has reduced his minimum to 1m.  Would you invest your money with him?  I'm very impressed with his fee structure (as far as I know, the only fund still using the old Buffett structure).

Thanks.  This board has been incredibly helpful.

 

Link to comment
Share on other sites

After some bad blowups (DFC) and a supposed change in his investment style towards less concentration, what are people's thoughts towards Pabrai and his funds now?  He has reduced his minimum to 1m.  Would you invest your money with him?

 

Obviously I'm a bit biased, but I have no problem recommending Mohnish as an investment manager.  You should be prepared with volatility with any investment manager that focuses on equities, and Mohnish's partners who joined in the last couple of years probably wish they had waited, but long-term he will do very well...he's a bright and humble guy.

 

He's also my friend, but I don't think he needed to change to a less concentrated fund.  He rebounded 50% in the last quarter, and I would suspect if he had stayed the course on his old philosphy of a concentrated portfolio, the rebound would have been even higher.  But an investment manager has to do what he is comfortable with, and a more diverse portfolio gives his partners more comfort.  The volatility in his fund would have probably scared off the more recent investors (last 2-3 years), but the ones that have been with him since the early days understand the fund and they've enjoyed better returns over the long-term.

 

The problem is, that a more diverse portfolio doesn't necessarily reduce volatility, if you continue to have correlated risk or you have a broad market decline like we saw in 2008.  Ask Bill Miller or a host of other managers who had greater than 20+ positions.  The problem was correlated risk and not enough cash holdings, not the concentration of the portfolio.

 

I'm very impressed with his fee structure (as far as I know, the only fund still using the old Buffett structure).

 

No, there are a number of funds that use the same fee structure these days.  The Lion Fund, Dardashti Capital, Braewick Capital, Lindmark Capital, Chanticleeer Advisors, Pacific Vista, us at the MPIC Funds...the list goes on and on!  Cheers!

 

 

 

Link to comment
Share on other sites

 

No, there are a number of funds that use the same fee structure these days.  The Lion Fund, Dardashti Capital, Braewick Capital, Lindmark Capital, Chanticleeer Advisors, Pacific Vista, us at the MPIC Funds...the list goes on and on!  Cheers!

 

 

 

 

Hi Parsad, thanks for the thoughts.  Of these funds that you mentioned (with the exception of yours), would you consider investing with any of them over Pabrai?

Thanks again.

 

Link to comment
Share on other sites

Hi Mhdousa,

 

My situation is kind of different than the general public.  It's probably the same for many of the managers I've mentioned, including Mohnish.  Generally, we don't invest with other managers for a few reasons:

 

1)  We trust our own instincts and investment philosophy

2)  We generally know that there is no way we'll screw ourselves over, whereas there is always the possibility someone else may

3)  We want our partners to know that we have our own capital invested with them

4)  It is more cost efficient for us to manage our own capital, as we can control trading costs, position sizes and other administrative costs

5)  We get a cut of our own profits when we've invested in our own fund, whereas that incentive allocation would go to another manager

6)  Depending on where we live, we may not be able to invest with managers in certain jurisdictions, unless we invest through one of our subsidiary companies

 

There are many good managers out there, and many are my friends.  I don't like to tout any one single individual, but I will make one exception, as it will be pointless to invest in his fund since he probably won't take any new money. 

 

Due to his age (31), abilities as an investment manager(beaten the S&P500 by 17% annually for the last nine years), entrepreneurship (a couple of businesses), operational and leadership skills (TLF, WEST, SNS), and track record to date, Sardar Biglari ranks right on top!  He's simply as impressive as they come and he's executing his playbook flawlessly. 

 

To put it plainly, I don't believe I know anyone who has bigger balls!  ;D  I didn't really think much of him the very first time I met him, but over the years I've watched him very closely, spoken to him on many occasions and studied every little detail of his investments...the guy is the real deal.  I'm sure there will be people who will stay stuff, and he will make mistakes where people will jump on it, but they did the same thing to Buffett, Prem and anyone else who aspires to great things.  In 10 years, we'll be talking about him like Prem Watsa or Eddie Lampert.  Cheers!       

Link to comment
Share on other sites

There are many good managers out there, and many are my friends.  I don't like to tout any one single individual, but I will make one exception, as it will be pointless to invest in his fund since he probably won't take any new money. 

 

Due to his age (31), abilities as an investment manager(beaten the S&P500 by 17% annually for the last nine years), entrepreneurship (a couple of businesses), operational and leadership skills (TLF, WEST, SNS), and track record to date, Sardar Biglari ranks right on top!  He's simply as impressive as they come and he's executing his playbook flawlessly. 

 

 

well, i'll be.

 

i never thought we'd see such an unequivacably personal view expressed ever since you became a money manager, with all the attendant concerns about conflicts of interest & talking your book that comes with it. but certainly i'm happy to see your enthusiasm for him remains undiminished, despite controversy & criticism sardar has attracted recently.

Link to comment
Share on other sites

 

 

I have also been very impressed by what Sardar has accomplished so far with WEST, FRN, and SNS, not to mention the Lion Fund.

His letters are very Buffettish, concise,clear language with not much hint of an ego.

 

I look forward to continue my modest : ) investments with him and I plan on going to the WEST meeting this year.

Link to comment
Share on other sites

Hi Mhdousa,

 

My situation is kind of different than the general public.  It's probably the same for many of the managers I've mentioned, including Mohnish.  Generally, we don't invest with other managers for a few reasons:

 

1)  We trust our own instincts and investment philosophy

2)  We generally know that there is no way we'll screw ourselves over, whereas there is always the possibility someone else may

3)  We want our partners to know that we have our own capital invested with them

4)  It is more cost efficient for us to manage our own capital, as we can control trading costs, position sizes and other administrative costs

5)  We get a cut of our own profits when we've invested in our own fund, whereas that incentive allocation would go to another manager

6)  Depending on where we live, we may not be able to invest with managers in certain jurisdictions, unless we invest through one of our subsidiary companies

 

There are many good managers out there, and many are my friends.  I don't like to tout any one single individual, but I will make one exception, as it will be pointless to invest in his fund since he probably won't take any new money. 

 

Due to his age (31), abilities as an investment manager(beaten the S&P500 by 17% annually for the last nine years), entrepreneurship (a couple of businesses), operational and leadership skills (TLF, WEST, SNS), and track record to date, Sardar Biglari ranks right on top!  He's simply as impressive as they come and he's executing his playbook flawlessly. 

 

To put it plainly, I don't believe I know anyone who has bigger balls!  ;D  I didn't really think much of him the very first time I met him, but over the years I've watched him very closely, spoken to him on many occasions and studied every little detail of his investments...the guy is the real deal.  I'm sure there will be people who will stay stuff, and he will make mistakes where people will jump on it, but they did the same thing to Buffett, Prem and anyone else who aspires to great things.  In 10 years, we'll be talking about him like Prem Watsa or Eddie Lampert.  Cheers!       

 

Thanks for your honest thoughts.  I looked through my past emails and realized I had sent an email to the Lion Fund about 8 or 9 months ago, but never received a response back.  If anyone knows of any way to invest new money with them, I'd love to hear about it.

 

Adding to the list of funds using the Buffett partnership fee structure, there is the recently launched 402 Fund by an old investment analyst of Buffett, Ian Jacobs.  I'm not sure how excited to get about this fund and whether he's just piggybacking on the Buffett name.  You had posted a little blurb about this fund a few months back on the Corner of Berkshire and Fairfax main page.

 

Thanks again.

Link to comment
Share on other sites

Back to the subject of Pabrai Funds ;)

 

I am a big fan of Mohnish and have friends that have invested with him. But one caveat to the 50% rebound is the fact that his funds were down 60% in 2008 -- so they're still down 40% since the end of 2007. I have no doubt that Mohnish will eventually get his partnerships past their old highs, but it's important to know context when talking about his recent homerun performance (which is actually even more impressive than it seems, because according to Mohnish the 50% gains actually came to pass in a period of less than 6 weeks!).

 

Of course, if you were smart enough to put money into Pabrai Funds at any time during the first 3 months of 2009, you've obviously done extremely well!

Link to comment
Share on other sites

  • 2 weeks later...
  • 1 month later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...