An insight into the investing style of Mohnish Pabrai.

Mohnish Pabrai believes in value investing; an investment philosophy that is inspired by Warren Buffet.

Introduction -  

Mohnish Pabrai is a seasoned investor and the managing partner of the Pabrai Investment Funds, a family of hedge funds, which has grown from USD 1 million in 1999 to over USD 575 million in 2019. He is also the founder and CEO of an investment firm - Dhandho Funds. He believes in value investing; an investment philosophy which is inspired by Warren Buffet.

The investment firm of Mohnish Pabrai - Dhandho Funds thrives on the idea that you do not need too many stocks in your portfolio to achieve your goals. It believes that there are four keys to building wealth in the long term- start investing early, spending less than what you earn (thereby saving at least 5% to 15% of your earnings), utilizing the tax-deferred vehicles like IRAs and 401(k)s, and investing in low-cost index funds.

He has written two books on investing- The Dhandho Investor: The Low - Risk Value Method to High Returns and Mosaic: Perspectives on Investing. Through his book ‘The Dhandho Investor: The Low - Risk Value Method to High Returns’ he revealed that his core strategy is based on the idea that: “heads I win, tails I don’t lose much”. To simplify, he prefers to invest in businesses that have an upside exceeding the potential downside. The investor adopts a value-focused contrarian method of investing.

Let’s take a look at the stocks in the portfolio of Mohnish Pabrai.

As per the data published on Trendlyne, he has a net worth of over Rs 1,437.2 crore, and publicly holds three stocks which are:

Sunteck Realty Ltd, a luxury real estate development company headquartered in Mumbai. It aims to evolve as India’s most premium and trusted brand with high standards of ethical business practices, corporate governance and product quality. Over the last one year, the stock price went from Rs 273.75 to Rs 497.05, an increase of 81.5% YoY. Pabrai holds 97,81,736 shares of this company, and his holding value amounts to Rs 486.6 crore.

Edelweiss Financial Services Ltd is one of India's leading financial services conglomerates which offers a robust platform to a diversified client base in India as well as abroad. Over the last year, the stock price went from Rs 56.85 to Rs 81, an increase of 42.5% YoY. Pabrai holds 5,87,03,028 shares of this company, and his holding value amounts to Rs 475.5 crore.

Rain Industries Ltd is one of the world's leading producers of calcined petroleum coke, coal tar pitch and other high-quality basic and speciality chemicals. Over the last year, the stock price went from Rs 94.65 to Rs 251.95, delivering stellar returns of 166%! Pabrai holds 1,88,55,170 shares of this company, and his holding value amounts to Rs 475.2 crore.