Conversation with Mohnish Pabrai, M.P. at Pabrai Investment Funds (MIT Sloan/CAPD program)
What this covers
On March 12, 2024 MIT hosted a virtual conversation with Mohnish Pabrai, M.P. at Pabrai Investment Funds. The Pabrai Investment Funds (PIF) were inspired by the original 1950s Buffett Partnerships and are a close replica of the original Buffett Partnership Rules. The Pabrai Funds Managing Partner, Mohnish Pabrai, is an ardent disciple of Warren Buffett and closely follows Buffett's principles on value investing and capital allocation.
For more information about this virtual program please visit: https://mit.joinhandshake.com/events/1486404/share_preview
This virtual program was a collaboration between MIT CAPD and the MIT Brass Rat Investments - Guiding students on how to invest.
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Finding exceptional investment opportunities requires deep, narrow expertise (circle of competence), patience to identify rare "aha moments" when you understand something the world doesn't, and extreme discipline to act decisively only when conditions align—a pattern demonstrated by Buffett and Munger's dozen transformative investments across 58 years.
- Buffett and Munger found only ~12 great investments in 58 years because expanding circle of competence takes years of observation and learning (Sees Candies to Coca-Cola required 5-10 years of education on brands and pricing power)
- Each transformational investment required an 'aha moment' where the investor understood something the market didn't—Coke's multi-decade runway, Fiat Chrysler's franchise value, or Burlington Northern's efficiency gains—and this clarity comes only from deep rabbit-hole analysis, not macro predictions
- Success requires extreme patience interspersed with extreme decisiveness: long periods of nothing interesting, then sudden clarity leading to concentrated bets, combined with ruthless schedule discipline and focus only on what matters
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The reason it is so difficult for even brilliant investors like Buffett and Munger to find great investments is that expanding one's circle of competence requires years of observation and learning; you cannot artificially or quickly expand it, and you must stay within this narrow circle rather than being broad but shallow.
“we we have to stay within our circle of competence and when we start out uh young uh by definition the circle of competence is going to be pretty narrow and it might be initially limited uh to a subset of products and services that you you you directly use and then of course as you get to know the way the world Works uh bi osmosis that that Circle expands and um and as it expands and as you learn more things um you're able to uncover uh more opportunities uh but there's no real uh easy way or uh I would say prescribed way to increase that Circle”
Buffett and Munger's investment in Sees Candies required them to pay three times book value—a rarity for them at the time—and they later realized, after years of ownership, that the business had remarkable pricing power and brand strength that they initially underestimated; this education on brands took 5-10 years and enabled their later Coca-Cola investment.
“uh Burkshire made in Seas candy um C candy was a u really uh quite a stretch investment uh for them um one of the first times that Warren paid three times Book value uh for a business uh the family was looking for uh $30 million uh Burkshire offered 25 million and they also told the family at $25 million $1 they would walk away and um thankfully the family accepted uh their their offer”
Sergio Marchionne's playbook, which he learned from Lee Iacocca, involved removing all inherited direct reports and promoting talented individuals 3-5 levels below them to direct report positions, creating a fresh Young team that drove exceptional results.
“he learned a lot from Le aokoka and he took the Le aokoka Playbook and basically replicated it and what Le aokoka had done which was again when Chrysler was in deep trouble is he got rid of all of his direct reports that he inherited he went deep into the organization sometimes three four five levels below him and he pulled a bunch of 30 something about you know 7 or 8 30 something and promoted them to be his direct reports and basically there was this new Young team and they headed out of the park right I mean it was a very calcified business”
Coca-Cola has the advantage that unlike chocolate, it does not have an aftertaste that causes declining propensity to consume, allowing humans to consume it on a very regular basis without satiation, creating remarkable per-capita consumption statistics across different countries.
“Buffett has said that one of the advantages Coke has is that it doesn't have an aftertaste um we cannot consume endless amounts of chocolate you know after we consume some chocolate our propensity to consume more chocolate goes down but uh with with Coke and other products they have that uh propensity to have it on a very regular basis doesn't go down and uh and so you get to some remarkable statistics in terms of uh you know per capita a down servings per year in different countries”
In his 58-year run at Berkshire Hathaway, Warren Buffett identified approximately a dozen investments that truly moved the needle and made a major impact on the company's evolution, which equates to roughly one good investment every five years on average.
“last year uh Buffett in his in his letter had highlighted that in a uh 58 years uh you know run at Burkshire there were about a dozen Investments that had really move the needle uh had made a impact on and actually led to what we recognize as Burkshire today and and so Buffett said it was approximately one good investment every five years on average”
Warren Buffett's decision to help Charlie Munger fix the Berkshire Hathaway mistake in 1965 by selflessly partnering with him (despite Charlie initially having no ownership stake) exemplifies the giver mentality and led, after 11-12 years, to Charlie becoming vice chairman and co-architect of Berkshire's transformation.
“in 65 when he bought Burkshire hathway and Charlie told him he had made a mistake by buying burshire hathway and he said that it's okay you made the mistake I'm going to try to help you fix it and Warren said basically Charlie had no ownership stake in Burkshire at the time there was no plans for him to have ownership stake but he was going to selflessly help a friend right and and the the selfless helping of a friend led to about 11 or 12 years after that or I think 11 years when he became vice chairman”
When studying Fiat Chrysler, Pabrai learned about CEO Sergio Marchionne by examining his track record (8 years at Fiat, previous work at other companies), Harvard Business School case studies, and biographical materials, rather than relying on what Marchionne said would happen; past results demonstrated extraordinary leadership ability.
“to figure out the nature of management and the competence and capability of management is relative L straightforward um uh don't go by what they tell you what they say is going to happen just go by what's actually happened so if they've been around for 10 15 20 years um it's easy to look at the track record so we can go back so with Sergio there was a a very long history uh there were uh a few cases Harvard Business School had done on him uh and uh and there was a there was even a book about him uh not about him but which covered him Mondo Elli which was on the Elli family where they covered Sergio”
Investing is a game combining extreme patience with extreme decisiveness: long periods of nothing interesting, then sudden moments when an edge appears, and when clarity arrives, one must 'go all in' and act decisively; this combination of patience and decisiveness does not come naturally to most humans.
“investing is a game where there can be long periods where there's nothing interesting and then suddenly something shows up and suddenly you have an edge you understand things better than the rest of the world does or you've done a drill down which has helped you understand it better than the world does and then um uh as Charlie would say you go all in and so those uh those opportunities come uh few and far between usually they don't last for that long and so it's a game of um extreme patience with extreme decisiveness”
Using a 'work backward from your eulogy' framework: if something won't make it into your five-minute eulogy when you're 90 years old, you shouldn't spend time on it; this heuristic helps eliminate low-value activities and focus on the essential.
“if you work backwards where if you say Okay um U someone says to you you were 90 years old and yesterday you died and and pretend you're your best friend and your best friend's going to reite your eulogy and uh they're going to present this eulogy in about five minutes so it's like a one page or one and a half page long to your close friends and family okay and they're going to talk about whatever happened in your life and what great how great you were and all of that the question to ask yourself is if something's not going to make it in your eulogy why are you spending time on it”
Analysts were wrong about Coca-Cola's intrinsic value when Buffett invested. Incredibly smart and motivated people using the same data and information missed estimating Coke's true value. The gap between analyst consensus valuations and the stock's actual intrinsic value remained invisible to the market despite available information.
“when when you know Buffett bought Coca-Cola um I think all the analysts were bearish everybody had a price Target that was nowhere close to what the intrinsic value of the business was and is today you had incredibly smart people looking at the stock um people want to make money who are very motivated to make money uh and yet the analysts missed estimating the intrinsic value of Coca-Cola um”
Monish Pabrai generated returns of over 70% compounded annual growth investing in funeral homes during the dot-com bubble when most people were investing in tech stocks, leveraging his computer science background to invest contrarian to market sentiment.
“for the first few years of his investing career Mish generated returns of over 70% compounded and ual growth rate um investing in funeral homes during the when most people are investing in tech stocks during the dopc bubble uh and uh and you know Mish actually comes from a computer science background so it's born and brought up in India uh studyed Computer Engineering at Clemson University in mid 1980s”
Roberto Goizueta's innovation at Coca-Cola was separating the bottling business from the concentrate/syrup business, with concentrate acting like a software company where a product created for $1 could be sold for $5-10 with the ability to continuously increase prices.
“one of the things that Roberto Goa was doing was he was separating bottling from the syrup business bottling from the concentrate you know the two businesses uh he was basically separating them out and you know the the concentrate business which is the one that Koke is in today that's like a software company you know basically you know product you create for a dollar gets sold for5 or $10 and uh and you can keep increasing the price on that”
At See's Candies, Buffett's primary involvement was raising prices on January 1st each year, putting through price increases of 10-15% when inflation was 3-5%, yet customers did not protest and volume growth was only 1.5-2% annually despite these massive price increases, demonstrating the pricing power of the brand.
“with c&'s the only area that he got involved in was on January 1st he raise prices on the candy every year and so he basically had them send them the price list and he would scratch out all the old prices and put in all the new prices and tell them okay this is the new prices for the year and those prices were being raised at significantly above the rate of inflation and what they observed was uh the pounds of candy sold um grew on average from the time they bought Seas till about today it's grown at approximately one and a half or 2% a year and which they actually found quite stunning because they were you know putting through 10 15% price increases uh when inflation might be 3 four 5% or something so sign signicantly above inflation and um the customers didn't protest”
See's Candies is heavily a California company and remained geographically concentrated because the business model based on dedicated retail outlets and box chocolate could not be successfully replicated in other locations despite repeated expansion attempts, making it a locale-specific business rather than a national or global franchise.
“C&'s is very heavily a California company um if we look at California GDP growth um in that period from let's say the mid 70s to let's call it 2000 if you look at that 25e period uh California GDP probably grew at a faster rate than US GDP um and it might have grown four to 5% a year at least in the 70s and 80s uh so C&'s was growing uh below California GDP in terms of um volume growth it was growing ahead of California GDP from a revenue point of view and part of that might have been the very heavy price increase they were going putting through but also they were dealing in box chocolate uh with you know dedicated retail outlets which is a very unusual formula and a formula they have found very difficult to replicate in other other location they've repeatedly tried to expand Seas to other locations and most of the time they have failed uh so even today it needs it it is heavily a Cali story”
Monish emphasizes that investors should not start with macroeconomic factors when making investment decisions, but rather should start with understanding individual businesses and their competitive advantages, with macro considerations remaining only background context.
“it's it's the wrong question and the wrong way to approach it um you need to start with a business you don't it's it's a big mistake to start high level and try to go down that's just not a a good way to go about it”
Adam Grant's research in 'Give and Take' identifies three types of people: givers (who help without expecting returns), takers (who extract value without reciprocating), and matchers (who keep score), and recommends eliminating takers and matchers from your life while being a giver yourself.
“there's a um there's a book uh that came out a few few years back by Adam grant called give and take and um basically uh Adam Grant said there are three kinds of people in the world givers takers and matchers so the givers just you know help out other people without expecting anything in return the takers who you want to truly avoid in your life are the ones who want to just take from you without giving anything back and the matchers are the ones who like to keep kind of tabs oh he did me a favor let me try to do the same kind of favor for him and they feel good about that you want to eliminate the takers and the matchers from your life completely and you want to be surrounded by givers and you want to yourself be a giver”
Buffett and Munger were initially very negative on railroads as an investment category due to heavy regulation, high capital requirements, mandatory transport of hazardous materials at fixed prices, and inability to refuse shipments; however, they later realized that operational improvements like double-stack container trains and efficiency gains made railroads attractive, leading to their Burlington Northern acquisition.
“for the longest time Buffett and Munger were very negative on railroads rightfully so it's a very regulated industry it's very high capital uh Investments um you you have um you have to take loads of toxic chemicals which could cause you a lot of problem if there's a you know train train derailment or something you can't refuse shipments of chlorine or something because you're concerned about that and you don't get paid extra for it so basically because you're a common carrier you have to transport those things at published prices of other Commodities”
Charlie Munger's core principle in life was to 'try to be useful'—helping others without expecting return—and this philosophy of being a 'giver' (in Adam Grant's framework) without keeping score or extracting value is fundamental to long-term success and fulfillment.
“in one of his last interviews I think someone asked him you know what you what would you like on your gravestone and he said that uh I tried to be useful and and I think that's really exactly how Charlie went about his Affairs uh he was trying to be useful um till the last day 99.9 years”
To determine management quality and CEO competence, investors should examine the track record of what actually happened, not what management says will happen. A 10-15-20 year history provides clear evidence of competence and capability.
“to figure out the nature of management and the competence and capability of management is relative L straightforward um uh don't go by what they tell you what they say is going to happen just go by what's actually happened so if they've been around for 10 15 20 years um it's easy to look at the track record”
College students have a significant informational advantage over older investors because they are the first to adopt new products and services (landline cord-cutting, cell phones, Facebook, Chipotle); making a list of every publicly traded company you spend money on and revisiting it 10-20 years later will likely contain multiple 50-baggers.
“you have a big advantage over me in finding those great nuggets and those great future opportunities the reason you have an edge over me is because you are young and you are in a place where there's a lot of change change taking place and and so for example um landlines which you may not know what a landline is that's okay but the first people who disconnected landlines were college students okay”
Monish Pabrai sold his IT business in 2000 for $20 million and has over his investing career run over a billion dollars in assets, establishing him as a serious investor with significant track record.
“he sold his business I believe in 2000 uh for $20 million if I'm not mistaken uh over the years Bish has run over a billion dollars in a and has more recently launched the P wagons fund”
Geico, when Berkshire took control, had only 2% market share in the US auto insurance business. It has since grown to double-digit market share and is competing for the position of largest or second-largest auto insurance provider.
“you know when when Burkshire took control of Geico Geico had 2% mark market share um of the auto business auto insurance business the US it's a double digigit market share now and it's knocking on the door of the you know second uh the second largest or the first largest player”
One should apply the Seinfeld principle: when you encounter something that makes no sense or seems like an anomaly, write it down and investigate further; these anomalies often signal investment opportunities worth deep research.
“I think the thing is that he's writing down anything that looks like an anomaly or weird things about humans to him right and most of those may not pan out into something that turns into some great you know 10 minute or 15 minute uh you know standup routine but some of them will and so the discipline of sitting down every day so anytime you encounter something that makes no sense to you so when I encountered David and Ted vexler on GM it led to the work on fear Chrysler”
Charlie Munger's remarkable ability to quickly synthesize information and answer difficult questions with obvious solutions came from his practice of reading voraciously, filing information efficiently in his brain through mental models, and constantly synthesizing across domains.
“he would be focused on is like he was searching for a CEO for Daily Journal he was trying to find a successor uh there and he had his energies focused on that or for example when he was designing the dorms for UCSB you know I mean you know I'd go meet him he'd be working on the plans and he would ask me questions like you know how tall is a F-150 truck you know I'm I'm building a parking lot I want to make sure the F-150 can go through”
When studying Turkey's economy, Pabrai visited and analyzed approximately 70-80 listed Turkish businesses focusing on finding great businesses immune to macro changes, rather than making macro predictions; he found that a Coca-Cola bottler in Turkey would be valuable even in an extreme scenario (thermonuclear war reducing humanity to 2 million).
“I probably in the last few years visited probably 70 or 80 uh listed Turkish businesses and I didn't really care about the macro whatever is going on it was there in the background what I was looking everything was on sale everything was very cheap what I was looking for is the greatest businesses that were immune for to any of the macro things that are going on”
AI is transforming industries at such a rapid pace that one must 'short almost everything' because the world will change dramatically in 5-10 years; stock photography is likely already obsoleted by AI image generation, and many other business models face similar disruption.
“I think that I think you guys are so far ahead on that so that's a that's a great area to just look at what's happening on the campus um and here I was just remembering when when somebody asked about Buffett investing in cars they said I knew at least I should short horses but here it's like you have to short almost everything because like you just the world is going to change in 10 years you know five to 10 years because of this”
Coca-Cola at 138 years old is still not a mature company but an emerging growth story with potential in multiple countries and emerging markets, with the flagship Coca-Cola brand still representing 70-80% of value despite over 100 brands acquired over its history.
“if you look at Coca-Cola today you know it was founded in 1886 uh it's 138 years old um even after 138 years it is an emerging story and with emerging market growth and of numbers in a number of countries and uh even in some countes some areas have matured there are other areas which are very embryonic so even after 138 years Coke is not a mature company uh it's still growing and it's still expanding and it's actually more than 100 brands and the flagship brand still makes up probably 70 80% of the pie uh even after you know 138 years of all these different Acquisitions and different brands and different things they brought into the tent”
Monish observed that Charlie Munger was constantly focused on whatever problems he was working on at the time with complete attention, including searching for a CEO for Daily Journal or designing dorms for UCSB, and would not spend time dwelling on past accomplishments or legacy.
“every time I'd see him he was focused on a couple of problems he was working on at the time and those problems took 200% of his attention so I try to remind him about his legacy I try to remind him about the huge body of work that he had created and all these accomplishments in the past and he would brush it all aside he was not interested in even thinking about all that or talking about all that what he would be focused on is like he was searching for a CEO for Daily Journal he was trying to find a successor uh there and he had his energies focused on that or for example when he was designing the dorms for UCSB you know I mean you know I'd go meet him he'd be working on the plans and he would ask me questions like you know how tall is a F-150 truck you know I'm I'm building a parking lot I want to make sure the F-150 can go through I don't want to have a too higher you know thing so you know he was just constantly very focused on the the the topic at hand in front of him”
Dakshana Foundation operates on high-risk, high-return philanthropy principles similar to venture capital, not the low-risk, high-return approach of for-profit investing; the foundation accepts a high probability of failure because if the model works, it moves the needle significantly.
“in investing we try to go low risk High return uh we we try to minimize risk as much as we can can and we try to maximize the return as much as we can we want a huge Delta in those two if you want to make a difference in this world on the philanthropic side you have to go high risk High return so it's a lot more like Venture Capital uh and it's a lot more swinging for the fences so the the correct way to approach uh philanthropy is to go very bold uh and not be concerned if there a high probability of failure uh what you what you really want is that um that if it works it moves the needle in a major way and if it doesn't work um it's okay”
A day in Monish Pabrai's life consists of: no predetermined calendar (he says no to almost everything including calls and meetings); no schedule other than today's event (which was the only meeting on his calendar); complete flexibility to pursue rabbit holes whenever he chooses; prioritization of investment reading and business analysis when not actively investigating opportunities.
“the only thing only meeting or business thing on my calendar today was this event okay and I don't think there's anything on my calendar tomorrow and basically one of the things I learned from Boren and Charlie is be extremely good good at saying no so I say no to almost everything I especially say no to anything related to a call or a meeting or anything like that”
Pabrai reads voraciously but is a harsh grader of books; he may have read only a quarter to a third of the books in his library and abandons books that don't grab him after 10-30 pages, unlike Bill Gates who finishes every book he starts (which Pabrai considers impractical, as most books contain only 4-5 pages of valuable content buried in 300 pages).
“probably uh I may have read a quarter to a third of the books in my library so there's plenty of stuff on the shelves that I haven't gotten to yet so I can always wander in any area into any subject and um uh pick it up and uh I'm a harsh grader so a lot of books don't get finished you know one one of the things I found curious is Bill Gates says that once he starts a book he has to finish it and um I would be just so hosed if I had to do that because most books should be five pages long and they are 300 pages long and all the content is in four or five pages and I'm trying to get to those four or five pages of content uh that some idiot has buried somewhere”
One should not try to balance financial returns with social impact; instead, keep them completely separate ('separation of church and state'). When investing, focus purely on financial returns; when doing philanthropy, focus purely on impact. Mixing them is ineffective.
“um if you were to try find and you know if you do try and find a balance between both and then how I think we've you've kind of answered this well I would just say that you want to have separation of church and state so uh I don't think you want to mix investing with saving the planet um and and a lot of people try to do that so I think that when I'm looking at philanthropy I'm looking at philanthropy when I'm looking at investing I'm looking at investing and and the two shall never meet so it is it's two separate activities and two very different mindsets and I think trying to combine them in any way is not going to get you to the promised land okay”
Warren Buffett and Charlie Munger both guard their schedules carefully, close their doors to read and think, avoid putting unnecessary items on their schedules, and operate with 'less is more' discipline; this extreme focus and minimal commitment approach is central to their success.
“I think Buffett and Munger try to operate very similarly I saw this with Charlie especially I think Warren is very similar uh you know even though all those people in headquarters I mean he has his door closed and he's just reading and doing his thing or whatever he's doing and uh and he uh guards his uh schedule very carefully doesn't put stuff on the schedule um so I think less is more it's uh really important”
When Sergio Marchionne presented his 5-year guidance for 2017-2018 to investors in 2012, he gave specific black-and-white predictions that would have made Fiat Chrysler valued at less than one P/E ratio, which was extraordinary because nobody else in the auto industry does this (except Elon Musk, who typically misses his targets).
“Sergio actually had given fiveyear plans he was telling you what was going to happen in 2017 and 2018 and what he was telling you was going to happen in 2017 and 20178 made P made Fiat Chrysler less than a p one okay the no one believed him no one believed when he actually put it black and white in his presentations guys this is my guidance for 20 2017 in 2012 okay nobody does that in the auto business okay you know Elon does it you know but but uh uh he misses them usually but that's okay uh but but basically uh so I think I think just like with Co and Geo and others once you go down the rabbit hole and you find that there is meat on the bow and you keep digging uh basically the answers will keep coming”
It's very difficult for a company to convince a customer to give them money monthly if you're not already doing so. Companies must prove themselves to earn customer loyalty. A customer willing to spend even $5+/month with a company has already demonstrated that company's competitive advantage.
“it's very difficult for a company to convince you to even give them $1 a year or $1 a month it's very difficult they have to really prove themselves and there has to be something there”
Pabrai invested in Fiat Chrysler at a $5 billion market cap despite his own hatred of the auto industry and initial conviction that it was 'horrible.' His investigation found meat on the bone and he kept drilling, leading to valuations more than 10x the stock price.
“at the time when I started to study it I had deep hatred for the auto business extreme hatred um you know it's unionized it's high capex it's subject to consumer tasted you may spent three billion trying to develop a car and nobody likes it and and so on and you know it's so much of it is commoditized and so on is a lot of ugliness in the auto business and the reason I went down the rabbit hole is I saw that Ted Wexler uh had made an investment in General Motors and I think I saw that David Einhorn had made an investment in General Motors I said why would these two smart people invest in such a a horrible industry that we all know obviously is horrible so I said I only went down the rabbit hole to try to answer that question”
When Monish Pabrai launched Dakshana in 2007 with net worth over $50 million, he committed to giving 2% annually (cloning Warren Buffett's giving formula), which provided at least $1 million per year and enough 'ammunition' to do something meaningful; he fully expected to lose money for 10 years before gaining traction in year 11.
“in 2007 uh when our net worth was over 50 million uh I said okay I don't want to wait till I'm 70 or 80 years old to start giving money away I'll give away 2% a year okay and above 50 million 2% was at least a million dollar and $1 million gave me enough ammunition to do something meaningful”
In his personal investing journey of almost 30 years, Monish Pabrai has encountered only a handful of 'aha moments' where it was obvious to step up and go big, and he was able to recognize these moments and act decisively.
“when I look back at my own um investing journey I can see that there were these moments not that many uh in the last um almost 30 years um and um it was obvious that you had to step up to the bat and go big”
Dakshana Foundation achieved traction much faster than expected (within weeks rather than 10 years), found great leaders, discovered a working model, and formed partnerships with the Indian government, with negligible financial losses—Pabrai attributes this to luck rather than superior planning.
“after 10 years of hitting a head against a brick wall that was a plan for D what actually happened was we got Traction in a few weeks I ended up finding great leaders I found by accident a great model uh the model worked the Partnerships with the government of India actually came about so all kinds of unlikely things that should have not happened actually happened and we never wasted I don't think dakna spun it we and lost even $10,000”
When Pabrai invested in Fiat Chrysler, he made 5-6x returns on Ferrari (80% stake worth $500M on a $20M investment), but the biggest mistake was not holding Ferrari long-term, as it subsequently became a 25-bagger (roughly $500M profit on the $20M initial stake).
“actually Ferrari uh was a my I had a good return on Ferrari I think I made a five six times my money but the big mistake I made was it should never have been sold uh from then till now it's almost a 25 bagger and its 25 bagger on a $20 million investment is about four or 500 million”
Fiat Chrysler's core business consisted of three bulletproof franchises (RAM, Jeep, and minivans) that could each generate $5 billion+ annual cash flow, plus 80% ownership of Ferrari and stakes in Maserati and Alfa Romeo; the market cap was only $5 billion, suggesting valuations of 10x market cap once you accounted for discrete business unit values.
“they had uh the Ram franchise which was bulletproof it was a oligopoly they had the jeep franchise that was bulletproof um they had the minivan franchise that were bullet bulletproof the rest of it they could just toss in the garbage it didn't matter um and then they had 80% of Ferrari they had Maserati Alfa Romeo so when you start when you started to you know put the pieces together you know uh the market cap was 5 billion and RAM was going to produce more than than 5 billion a year in cash flow and Jeep was going to produce more than five billion a year in cash flow and then everything else is going to produce something you know so uh it was very easy to come up with valuations which was more than 10 times what the stock was”
When Pabrai invested in a Turkish Coca-Cola bottler about 5 years prior to the event, the Turkish lira/dollar exchange rate was approximately 5 lira per dollar; by the time of the event, it had reached 32 lira per dollar, and all dollar-denominated investments saw massive gains.
“when I invested in the Coke bottler and when I started going to Turkey 5 years ago it was five ler to the dog now it is 32 L to the dollar all our investments in dollars are up massively”
The Brassat Fund is a nonprofit long-short equity hedge fund run by undergraduate and graduate students at MIT, providing hands-on learning in how to analyze and invest in companies, developed in alignment with MIT's philosophy of 'mind and hand.'
“for those of you who may not be aware the brassard fund is a nonprofit long short Equity hedge fund uh that is run by undergraduate and graduate students uh following the completion of an educational program the fund itself provides a Hands-On learning experience on how to look for an investing companies and has been developed in line with MIT e thought of mind and hand”
The Pabrai Wagons Fund is a long-only globally opportunistic fund concentrated between 15 and 25 businesses in its portfolio which individual retail investors can invest in.
“he sold his business I believe in 2000 uh for $20 million if I'm not mistaken uh over the years Bish has run over a billion dollars in a and has more recently launched the P wagons fund so we hope to talk a little bit about that as well and we get the chance uh this this is a fund which is long only globally opportunistic and is concentrated between 15 and 25 businesses in its portfolio which you or I can invest in”
When asked about AI's impact on investment, Pabrai defers to young people on campus, saying he is 'too set in his ways' and that 'the MIT campus is front and center' for AI developments. He acknowledges transformational impacts everywhere but claims he cannot evaluate them from Texas.
“I am the wrong person to ask you should ask your fellow classmates so all the action that's happening in Ai and all the changes that are happening in Ai and what's going to change in the future future the MIT campus is front and center how can me sitting in Austin hold a candle to that”