Mohnish Pabrai Lecture @ MDI

Posted on by fundooprofessor

Mohnish Pabrai delivered an excellent talk to my BFBV students on 26 December, 2013. You can watch the video from:

The two videos displayed during Mohnish’s talk can be viewed from:

Published by fundooprofessor

I am Distinguished Adjunct Professor at Flame University, Pune. Previosuly, I was Adjunct Professor at MDI, Gurgaon, where I taught MBA students two popular courses titled “Behavioral Finance & Business Valuation"(BFBV) and Forensic Accounting and Corporate Governance (FACG) for many years. I am also Managing Partner at ValueQuest Capital LLP— an investment advisory boutique which helps its clients invest their capital in good quality businesses.

34 thoughts on “Mohnish Pabrai Lecture @ MDI”

  4. Dear Sanjay,

    Thanks for sharing this. I used to listen to his videos in the “youtube”, Especially his practical thoughts..

    I have a humble request – Cant you start a fund in “India” similar to Pabrai funds…

    Regards
    Jai

  5. Thank you Professor for organising the event with Mohnish and sharing the video…

    Separately, was awaiting for balance questions/answers on Relaxo case study wrt to management and valuation…

    Thanks once again.

  6. Superb lecture. Thanks for sharing.

    Woke up at 3 am to hear it uninterrupted.

    Mohnish resonates very well with low IQ investors like me. Cloning is understandable and doable too provided one can develop the right temperament and a basic frame work.

    We get an idea about some companies you own based on the blog posts.

    Would it be possible to share list of your holdings on a yearly basis or so, so that people like me can get an opportunity to clone you.

    The very fact that you freely talk about some of your holdings (like Ben Graham) show your generosity. Would it be possible for you to take a step further?

    Originality is a gift for few geniuses like you and lesser mortal like us in investing look forward to you.

    It is amazing to know from Mohnish that by ‘merely’ cloning Buffett some one could have beaten the S&P 500 by more than 10%

    Good to know about OID. I was a regular reader of ‘Outlook Profit’ and sad that it stopped in 2012 for lack of patronage. I wish equity culture grows because of the efforts people like you are putting on.

    We are very eager to meet and hear you day after tomorrow at Chennai. Thanks for providing us the opportunity. We are spreading the word to investors we know to utilize the privilege of hearing you.

  8. Dear Sir

    There was a question on ‘How to construct portfolio and capital allocation’. I think this is a question which continues to trouble most of the investors. Can you share your thoughts on this or recommend some books.

    PS: Some of the books by Peter Lynch and John neff recommend having growth stocks, cyclical and mature companies in portfolio.

  9. Dear Sir

    Great Videos, I have also stumbled upon Mohnish long time back , but I was so adamant ,Cloning did not enter my hard skull (may be its like human mistake -to evaluate our own ideas and reject other ideas on first thought , rather than Quality of Idea irrespective of where it comes from ),

    but it later stuck with me , that selective Cloning is very good idea – thats what I am shameless trying to do from you and some other great Indian Fund Managers

    Other Fund Managers are bound to disclose their holding by law ,but i really admire you to open up ideas in forms of teaching

    by reading you and than Mr Buffett , Mr. Graham and Mr. Munger -I can see a similar trend ,looks like you really also want to give back to soicety -in form of learning , guidance and teaching

    sir , may be one of repeated request -may be MDI can also record your lectures and post it in any website, will be a great learnings to us – your BFBV presentation are really vivid to get the main ideas , but still watching live videos may help to stick the main themes for a long period of time

    regards
    Hitesh

  10. Thanks, Sanjay, for extending the benefits of watching this video to people beyond MDI. Great investors always make it look easy, like Mohnish has done, but it is not. There are so many psychological traps that one needs to look out for. Bringing a calm & still mind into every investment act is easier said than done. This is a mental habit that also compounds, so earlier started the better. As once the habit is lost or diluted, it takes plenty of effort to recover the still mind. I keep practicing, and find my results are directly proportional to the state of mind that took the decisions.

  11. Hi Prof. Bakshi,

    I am one of your many followers/fans. At some point during the video, Mohnish mentions: Focus on absolute targets (like 26%)

    Now, this contradicts with the statement: Focus on process, not outcome.

    I am confused as to which would be the correct path to take.

    1. I don’t see any contradiction here. One is trying to justify charging a fee to manage other people’s money. And when one stretches out and reaches for a target (whatever that target may be) one gets focus.

      For example, if you say, you’ll only invest in potential 10-baggers over ten years, then if you really do focus on that, you will gravitate away from non-scalable businesses…

      To achieve your target, you’ll need a process— one that’s likely to work if you apply proper focus…

    1. How about cloning a thought process instead of outcomes? Isn’t that better? I don’t think Mohnish has said go blindly clone portfolios. I think his real idea is to clone the thought process…

      Believe me, you’ll be far richer (financially and intellectually) if you learnt to clone the thought process of a few role models instead of cloning their portfolios. And perhaps one day, your own evolution as a thoughtful “cloner” will inspire other people to want to clone how you think.

      1. Mr Bakshi, this is very relevant and inspiring.

        I think this is what we are trying to do when we read books or interviews of great investors – sifting through their thought processes and looking for thoughts that may be useful to us, in other words, thoughts that we could clone.

        In my early days as an investor, I used to get very touchy about using others’ thoughts – I wanted to put in my original thoughts; it used to be like an intellectual game and I wanted the intellect in the game to be entirely mine.

        A celebrated industrialist had once said “Ideas are no one’s monopoly” – at the time, it seemed like one was stealing someone else’s idea.

        Having travelled so far in my investing journey and after making several wrong turns, I realised that all investment wisdom in this world is nothing but regurgitated ideas.

        There is very little original investment research in this world. What passes off as investment research is nothing but old idea/s presented in a new format.

        As Jesse Livermore famously said,
        “There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”

        So, why re-invent the wheel? Why not just clone investment process/es that have been successful?

        Or, inversely, “unclone” what has not been successful (aka Mr Pabrai’s investment checklist, for example).

  14. Dear Prof Bakshi,

    Thanks for sharing the talk by Monish, I have been a long time fan of both you and Mr Monish.

  15. Dear Prof,
    Greetings and a hearty thanks for sharing the wisdom. My name is Manish Dhawan and I m a speculator by profession. I have a slight difference of opinion when it comes to risk management. Warren Buffett and the cloners define the risk as possibility of permanent loss of capital. I may b wrong,( please enlighten me if I am) but if u add a concentrated approach to that where u wager 25% on each bet is a recipe for disaster.

    4 bad bets would create a ruin, and in fact 2 bad bets will create a psychological uncle point( of no return, self doubt and complex).

    I will request u to look at my point without commitment and consistency bias (of following value investing) and probably add a chapter on position sizing and risk management in your course else it would b a case of when and not if 4 bad bets create a ruin.

  17. I totally agree with Mohnish that MDI is the Columbia Business School of India. We all are also waiting when you will start uploading your lecture videos. Thank you professor ! Thank you !

  18. Continuous reading of Buffett, Munger and other value investors point out basically to only 2 things:
    1. Stick to what you understand, and
    2. Stick to people you can trust.
    This is just my interpretation.
    If one can get a above combo, that is enough to deliver above average returns.
    Just like Mohnish, there is another value investor named Sardar Biglari (http://www.biglariholdings.com/). Biglari is young compared to Buffett and Mohnish, but his record is also enviable.

    1. Hi Manav,

      Excellent 2 points and thanks for sharing on the Biglari holdings.

      My most important lesson from Buffett specifically is accumulate cash and hold on in Debt till the time you get the right valuation as that mostly determines your return.

      I forgot the period of continuous 7 years where Buffett did not add new capital in to equity. That’s his strength in spite of being the best allocator of capital.

      Thanks
      Jai

  19. Thank you sir for uploading this lecture.

    I wanted to ask you which books you can recommend me to read to understand financial institutions (Banks) and on derivatives?

    Kind regards

    Parz

  20. thanks a ton for sharing the video sir…like in his book…mohnish parabi has told the name of few journals, websites and forums (like valueline, valueinvestor insight, gurufocus,etc.) to follow so as to get the track of market…
    Please let us know the sources/publications that you would recommend/advise to follow indian markets…

  23. An unrelated question about Thomas Cook, it was said to be trading at 10xFCF when Prem Watsa purchased it ~Rs. 50. How can I find out the current revised Price/FCF ratio for Thomas Cook at a price of ~Rs. 80? I looked on MorningStar.in but the numbers look all over the place.

    1. Can you please ignore this? I realize that has been discussed under the ‘Thomas Cook’ thread but I’m not able to remove this comment.

  24. i love that proof by contradiction of yours , sir one query I have in the case of NBFC like shriram transport finanie which number to look for validating profits , like in case of manufacturing -cash flow from operations validates the pat , is there a way to find something do in finance for whom cash is a raw material – I have yet to figure out same
    Thanks again for all the learnings

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