Legendary value investor Mohnish Pabrai on Reysas, Position Sizing, Big Tech, ChatGPT and more
What this covers
In a wide ranging discussion with legendary value investor Mohnish Pabrai, we hear about his investments in Reysas, Brookfield, his thoughts on position sizing and concentration as well as Big Tech and how ChatGPT (and others) might disrupt the space.
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Monish Pabrai argues that systematic value investors should separate the quality of underlying business assets from macro/governance concerns (using the Munger Belridge principle), and that Turkey presents exceptional value opportunities precisely because sentiment and currency collapse have created deep discounts on monopolistic businesses whose economics are inflation-protected.
- The Belridge Oil example shows Munger overweighted CEO problems and underweighted underlying asset quality, a mistake Pabrai avoids when evaluating Turkish businesses
- High-quality Turkish companies like Raysas and TAV Airports have durable competitive advantages and capital-efficient management that are uncorrelated with country risk
- Inflation-indexed assets and businesses with pricing power make currency collapse irrelevant to long-term returns
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Ferrari is a business with exceptional characteristics where the higher the price of the product, the greater the demand—an unusual inverse price-demand relationship that creates a moat.
“very few businesses have the characteristics that Ferrari has. Uh you know, the higher the price of the product, the greater the demand.”
The United States is the only developed nation with population growth, a dynamic advantage it has maintained for a very long time and continues to have today.
“United States is the only developed nation which has population growth. Um no other developed nation has that dynamic and we've had that dynamic for a very long time and we still have population growth growing on today”
South Korea is always cheap on valuations, but faces headwinds from demographic collapse—birth rates are at 0.7-0.8 children per family, far below the 2.1 replacement rate and lower than Japan's 1.4.
“Korea is always cheap. Uh and I think one of the big challenges we have with Korea is that their birth rates are now well below even China. And so, you know, we need like, you know, couples who have 2.1 kids to keep population at break even. Uh Korea's actually alarming. It's down to 0.7 or 0.8.”
TAV acquired the Almaty airport in Kazakhstan in the middle of the pandemic when air traffic was near zero, obtaining not a temporary concession but permanent ownership rights—an extraordinarily unusual situation for a major private airport.
“They acquired one airport during the in the middle of the pandemic when air traffic was close to zero in Almaty in Kazakhstan... Almaty is the largest city in Kazakhstan. And uh that was an outright purchase. It is the only airport I'm aware of in the world, major airport, that's privately owned forever. So, this wasn't a 30-year, 50-year concession. It's a permanent concession. They they own it permanently.”
Amazon is the kind of company where investors don't even know what businesses they'll spawn and be in 10 years, and this spawning engine is very much alive and kicking.
“Amazon is the kind of company where you don't even know what businesses they'll spawn and be in in 10 years. And um and that spawning engine is very much alive and kicking.”
Assets like Almaty airport would not be available at 3x cash flow valuations on the New York Stock Exchange due to competition among bidders and higher market efficiency.
“Really interesting. And and something like that would not be available at those type of prices on the New York Stock Exchange.”
When you blend together all airport revenue streams (regulated and unregulated), the economics are monopoly-like and cash-cow-like if you don't overpay for the operating rights.
“when you blend it all together and you look at the economics, especially if you don't overpay for these things, um it's a monopoly asset. It's a cash cow”
Brookfield operates as an oligopoly where large institutional investors (sovereign wealth funds, pension funds) with massive amounts of capital to deploy have only 3-4 major places they can put money—Brookfield, Blackstone, KKR, Apollo—creating a structural advantage for all players.
“there are like three four players that all these guys have to come to. At the end of the day, when they want to invest, they have to come to one of these three or four toll bridges, uh, to to make the investment.”
KKR and Blackstone originated from classic LBO private equity backgrounds, while Brookfield originated from decades of history as a core investor in their own assets (not managing other people's money).
“if you look at, uh, KKR or a Blackstone, you know, they come from our private equity world. Uh, you know, if we go back to the history of the original kind of funds and deals and whatever, you know, it was a, you know, classic um, you know, LBO private equity type type starting point. Brookfield's, uh, starting point actually goes back a long way, several decades. And they really were not a uh, manager of other people's money. They were really investing their own money.”
Turkish stock market circuit breakers limit daily price moves to 10% per day, and after the earthquake almost the entire market hit the 10% lower limit regardless of whether individual companies were directly affected by the tragedy, prompting regulators to close the market until February 14th to prevent panic selling.
“in Turkey uh basically stocks can go up or down uh at most 10% a day. And uh for a couple of days they hit the 10% lower limit. It didn't really matter which stock it was. I think almost the whole market was hitting the lower circuit. Um even though a lot of the companies are not directly affected or may not be that affected by the tragedy. Um and so uh I think the regulators felt that you know, give it some time for people to not do panic selling or whatever else.”
Turkish Coca-Cola bottler (Coca-Cola Icecek) has an exclusive right to sell all Coke products in Turkey and operates in 12 other countries including Pakistan, and they own 49% of the Pakistani Coke bottler while Coca-Cola Atlanta owns 51% (which they will likely sell to the Turkish company in coming years).
“the Coke bottle in Turkey has an exclusive right uh to sell all Coke products in Turkey. Uh, not only in Turkey, they're in 12 other countries, uh including Pakistan. So, they do all the Coke bottling and sales in Pakistan. They own 49% of the Pakistani Coke bottler and the Coca-Cola company in Atlanta owns 51%”
Munger called his decision to pass on buying an additional 1,200 Belridge shares at the same price his biggest mistake, as those shares would have generated approximately $4 million in proceeds, converting to about $6 billion in Berkshire shares today.
“Charlie says Belridge was his biggest mistake because the 1,200 shares that he chose not to buy, that he knew were worth at least five or 10 times uh what they were being offered at, uh would have would have given him about another uh 4 million in in proceeds. And that would have converted to about 6 billion and counting into Berkshire shares.”
Charlie Munger corrected Pabrai by noting that Berkshire's utilities and power generation business is also very durable and unlikely to change significantly 100-200 years from now.
“And Charlie corrected me. He said, "Well, our power business is pretty good, too." And he's right. Yeah, the utilities and power business that they have is is another amazing business and again, that's unlikely to change, you know, in terms of how how we get our electricity and power and all of that.”
China also faces negative population growth like Korea, but Korea's demographic situation is more alarming than China's due to its lower birth rate.
“uh China also is facing that um and uh and it's a serious issue even in in China but uh but Korea out of all of them between China, Korea, and and Japan Korea has the most extreme problems with uh the birth rate”
India's GDP is expected to grow at 6-7% annually, while power consumption is expected to grow at 8-9% annually over a relatively long period, driven by factors like movement toward EVs and increasing per capita power consumption.
“Indian GDP is expected to go up like 6, 7% a year. Power might go up 8, 9% a year. Um over a relatively long period of time. And with that type of growth with a complete monopoly position where they are at 8% of the pie today and it becomes 25% or something in 5 or 10 years um that's an exceptional business.”
Only about 4-5% of airports in the world are privately run, and privately run airports operate much better than government-owned ones—example: LaGuardia has been transformed dramatically since becoming privately operated.
“only about 4 or 5% of the airports in the world are private. And privately run airports run a lot better. You know, LaGuardia now is a private airport. And you look at LaGuardia 5 years ago. You look at LaGuardia today and you can't even compare the two. And, uh, that would not happen under government ownership.”
Brookfield is a very strong recurring revenue business with multiple facets: asset management with fees on other people's money, co-investment with their own balance sheet, minority stakes in other companies they've listed, and owns very high-quality assets across real estate, hydro plants, railroads, and other industries.
“Brookfield is a is a very strong recurring revenue business. It's the it's got multiple facets to the business. One side is asset management uh, where they have, you know, other people's money that they're putting out to work and, you know, getting fees and uh, such. They also have their own balance sheet where they co-invest and so on. And they've got, you know, minority stakes in other companies they've listed in the past and so on. And, you know, they've just got the the quality of the assets that they own uh, across different um, different industries is truly exceptional.”
Bruce Flatt, when becoming Brookfield's CEO, divested all businesses he didn't think were high-quality (including mining operations) and focused the company on extremely high-quality, long-lived infrastructure assets.
“when Bruce Flatt came on the scene, uh, and became CEO maybe more than two decades ago, um, he got rid of all the businesses which he didn't think were that high quality. They were in a bunch of mining and different things. He got rid of those businesses. And he focused on, um, extremely high quality long-lived infrastructure assets.”
Trophy office properties have long-duration leases, so landlords continue collecting rent even as tenants vacate the space—Brookfield benefits from this duration misalignment because empty buildings still generate contractual revenue.
“these are long leases, so it takes a while. So even if the a tower is, you know, got a lot of vacancy, Brookfield may still be still be collecting rent on it.”
Pabrai has always been a big fan of Jeff Bezos and Andy Jassy, and considers Amazon the most exceptional business ever created in the history of mankind.
“you've always been a big fan of uh of of Jeff Bezos and Andy Jassy and all that. Um have your thoughts on Amazon changed at all over the last year? I mean, I think it's the probably the most uh exceptional business ever created in the history of mankind.”
Coca-Cola arranged for the Turkish bottler to acquire struggling bottler operations in Central Asian countries (like Turkmenistan) and even subsidized these sales, demonstrating the company's reliance on and support of the Turkish operator as their preferred regional partner.
“they had one in a I forget. I think it was uh Turkmenistan, uh one of those uh Central Asian countries where uh the government was the bottler, wasn't doing that great, and basically what what Coke did is they arranged a sale to the Turkish company. And uh and they even subsidized uh the sale for them.”
Airport concessions typically operate under a BOT (build-operate-transfer) model where operators receive 25-50 year concessions, pay the government an upfront fee (e.g., $500 million), and then operate the airport with regulated portions of revenue (like passenger fees) and unregulated portions (like duty-free, food and beverage).
“typically, with airports, what happens is it's a BOT model, build, operate, transfer. So, you will get a 25, 30, 50-year concession with some airport where you say, "Okay, I'll build a new terminal. I'll do the XYZ. I'll give the the government half a billion dollars and against that, I get the right to run the airport for, you know, 30 years or 50 years. And there are portions of the revenue that are regulated, like the passenger fees and all of that. And there are portions of the revenue that are not regulated, like duty-free and food and beverage and that sort of thing.”
Amazon's transformation from a consumer commerce business to having a massive footprint in enterprise cloud infrastructure (AWS) represents a major strategic leap that they executed better than everyone else.
“to think about a business which was a, you know, consumer commerce business to have this massive footprint in enterprise core web infrastructure, uh that leap, that's a big leap, okay? And they made that leap and they, you know, ran circles around everyone else.”
Work-from-home trends have affected office property valuations globally, with trophy properties in tier-one cities (like those Brookfield owns) experiencing lower rents but not high vacancy, while peripheral properties face higher vacancy.
“clearly, uh, you know, trophy I I mean, I would say office properties in general uh, across the world are facing much higher vacancy rates than they did before, uh, because of this trend. And so obviously that demand has gone down. Because Brookfield sits at the very top end, so they've always wanted to invest in tier one cities in the very best properties, you know, the kind of the trophy properties in these streets like Brookfield Place or Canary Wharf and so on. And so, these would be the last ones, uh, affected, you know. And so their rents will go down, but the ones at the periphery will just have high vacancy. Whereas the trophy properties will just have lower rents.”
The US has an independent central bank that looks at data and acts prudently, even if they don't always get everything correct, and this gives Pabrai confidence that inflation will eventually be contained.
“we've got a great central bank. Uh an independent central bank. Uh they may not always get everything correct. They may undershoot, overshoot, all of that. That's part of the deal. Uh but I think they will look at the data and for the most part they'll act prudently. So, I think over time we'll get to where we need to get to.”
Population decline is a very strong headwind for investing in any country, making China, Japan, and especially Korea problematic long-term investments despite their economic development.
“it's a very strong headwind uh in investing in any country if you're going to see negative population growth.”
Under Jassy, Amazon is deemphasizing businesses with lower returns on equity and starting to do share buybacks now that they generate more cash than they need.
“under Jassy, he's going to deemphasize the businesses that um you know, have lower returns on equity and all of that and and I've even now seen they're looking at buybacks and things where they're actually starting to generate more cash than they need.”
Meta signed a very long lease for the tallest building in Austin but has already put the space up for sublease, meaning Meta is on the hook for rent payments even though they no longer need the space, while the landlord is unaffected by Meta's changing needs.
“Meta Meta Meta has a big, uh, the largest, uh, the the tallest building in, uh, in Austin. Now they they signed a very long lease for that. And it's still not going to be ready for I think a year or two. And they've already, you know, put it all up for sublease. You know, so they're on the hook for that rent, but whoever the landlord is is not affected by Meta's decision that they don't need that space.”
Brookfield provides a 5-year outlook of expected business performance and has historically exceeded those targets, suggesting management credibility and upside optionality.
“they actually give you, uh, you know, kind of 5-year outlook on what they expect their business to look like in 4 or 5 years. And they've been doing it for a while and they were actually uh, exceeding what they set as their targets in the past.”
Amazon's retail fulfillment, advertising, and other aspects of the business look great and generate much better economics than direct retail ownership.
“when you look at the numbers, they not to look that great. But other aspects of that business where they're doing fulfillment and advertising and all of that, uh those are great.”
Brookfield has faced some challenges with office property holdings, but the impact is mitigated by the long-lease structure and the quality of their portfolio, making the risk manageable.
“they have some challenges uh, with their properties. But also, you know, the these are long leases, so it takes a while.”
When Pabrai invested in Fiat Chrysler in 2012, the market cap was $5 billion while sales were $140 billion (trading at less than 4% of revenue), and 80% of the $6 billion equity value was Ferrari, plus Jeeps, Ram, Maserati, and other businesses.
“when I made the investment in Fiat Chrysler in 2012, when the market cap was 5 billion and their sales were 140 billion, Fiat Chrysler was trading at less than 4% of revenue. Okay, it was just, you know, just the equity was and 80% of Ferrari was inside that 6 billion.”
Ferrari released an SUV starting at $421,000, but you can't actually get one for that price—when optioned out it costs about $600,000 or more, and if you try to buy one from someone who owns one, you'll likely spend over $1 million, demonstrating the scarcity premium.
“they recently released their SUV, which they don't even want to call an SUV. You know, it's going to start at 421,000. You're not going to be able to get one for 421,000. By the time you option it out, it's probably 600,000 or something. And you can't get one at 600,000. They're all sold out. And and so if you actually try to buy one from someone who's got one, you know, you could probably going to spend spend over a million on that.”
Ferrari is a business with 80% margins, which Pabrai considers an incredible business, though he was initially annoyed by the SUV, he understands they had to do it.
“Yeah. 80% margins. I I I was a little annoyed by the the SUV, but I I know they had to do it.”
When analyzing investments in places like Turkey, investors should weigh the country-specific macro and governance risks correctly, but rejecting an investment purely because it's in Turkey is equivalent to Munger rejecting Belridge purely because the CEO drinks—it's overweighting a secondary factor relative to the fundamental asset quality.
“when you as an investor look at these things, uh it's important that you weigh the factors correctly. And there is some weight that you should give to the fact that it's in Turkey. But but to say that I'm going to reject it because it's in Turkey is like Munger saying the CEO drinks too much.”
Pabrai argues that minority owners of a high-quality business should think like the Walton family (which owns vast majority stakes in Walmart decades after Sam Walton's death), keeping their position even if it represents 90%+ of their wealth, and shouldn't sell high-quality businesses even when fully or slightly overpriced, only when egregiously overpriced.
“if we own the Coca-Cola company's bottler in Turkey, we should think of ourselves like a minority owner. And if if we were a minority owner of a high-quality business like that, you know, we shouldn't even sell it if it gets fully priced. We should you not even sell it when it gets overpriced. We should sell it when it's egregiously overpriced.”
Munger's principle from the Belridge mistake was that he overweighted the CEO's alcoholism and underweighted the basic economics of the oil field, which couldn't really be screwed up regardless of the CEO's personal flaws—'the oil field didn't drink.'
“he said the oil field didn't drink. Okay, he said it was the CEO who who drunk. And he needed to what he didn't separate was the oil field from the CEO.”
Very few businesses in the universe of listed companies qualify as 'great businesses'—probably less than 3-5%—and if investors find themselves with fractional ownership of one of these businesses, they should hold on for dear life.
“There are very few businesses in the universe of listed companies that would qualify as great businesses. Uh probably I would say less than 5% or 3% of listed companies would qualify as great businesses. If you find yourself in the very happy situation of fractional ownership of one of those businesses, hang on for dear life.”
There's no need to hedge the Turkish lira if you're invested in Turkish companies that are unaffected by inflation, because the underlying assets and revenues will move with inflation regardless of currency movements.
“There's no need to hedge the lira if you are invested in a sliver of the companies in Turkey that are unaffected by inflation.”
Brookfield's approach is fundamentally different from PE firms: they start with great assets first and then figure out how to finance and optimize them, rather than starting with financial engineering and assuming they can create value.
“Brookfield didn't take that approach. Their approach was that at the core they want to have a great asset. And then later they want to look at what, you know, how how they can finance and do other things with it to make it great.”
When a business is reinvesting at very high rates with relatively young leadership, Pabrai's thesis is to 'let this ride' for 20 years, expecting the business could be worth 10-30 billion or more by 2040-2043, and therefore leaves it alone.
“if if a business is reinvesting at very high rates, and you know, the leadership is relatively young, my take on Raysas was that we're going to let this ride for what, 20 years, you know. Uh it might be 10, 20 billion, 30 billion, who knows what it is in 2040 or 43. So, uh just leave it alone.”
Given mega-cap valuation levels, Pabrai's strategy is to look for the next compounders at smaller market caps with long runways rather than trying to invest in mega-cap positions, and Tencent was an exception to this rule.
“at really go back to trying to find the the next compounders at smaller market caps that can get, you know, long runways and get there. So, that's kind of where I end up. You'd put Microsoft in the same bucket as Apple? No, I think I think I think Microsoft um between the two businesses, I'd be more interested in Microsoft than Apple.”
Pabrai uses the example of Walmart trading at 100x normalized trailing earnings as a level where even the Walton family should consider selling, but at 40x, 30x, or 20x multiples, they should hold because earnings will continue to compound and multiple compression provides additional upside over longer time horizons.
“Walmart went to something like, you know, 100 times normalized trailing earnings, yeah, maybe the family should look at selling. But at 40 times, 30 times, 20 times, you know, it's a good idea not to do anything. Just because you think the earnings will continue to compound and that multiple compress over a longer time horizon.”
Assets under management for the major alternatives firms will grow substantially, carried interest and fees will grow substantially, and these firms are creatively entering new sectors (music, semiconductors) to capture additional capital flows.
“the assets under management they have is going to grow a lot. The carried interest is going to grow a lot. The fees are going to grow a lot. And they are creative about entering new areas like music or, you know, semiconductor foundries and so on.”
Pabrai's strategy is to make bets where macro events and recessions don't have much impact, focusing on businesses like IEX, Raysas, and TAV Airports that are structurally insulated from economic cycles.
“I'm trying to make bets where those types of events don't have that much impact, you know? I mean, I think uh that's why we I have an interest in things like IEX and I have an interest in things like Raysas and Tav. And uh you know, the Coke bottler and so on. So, I think those are more interesting to me because I don't have to think about these things too much.”
Pabrai has told his fund investors that if they don't like his approach of holding concentrated positions in cheap, high-quality assets without diversification, they should redeem and move on, as he won't change his perspective.
“I told my investors, "Look, uh it's very concentrated. Uh we're not going to lighten up because we when we look at what we own, they're very cheap and very good assets. And uh even if it gets to 80% in these two stocks, we don't plan to lighten up." So, I told them that if they don't like that approach that I'm taking, they can get off the bus. And they can they can redeem and move on, but I'm not going to change my perspective on that.”
LVMH has a much stronger probability of existing 50 years from now than Amazon does, despite Amazon appearing totally dominant today, suggesting that mega-cap technology dominance doesn't guarantee long-term survival.
“I would say if someone like LVN LVMH has a much stronger chance of being with us 50 years from now than Amazon does. Um you know, even though Amazon looks just totally dominant today.”
Meta took a $2 billion charge last quarter related to office consolidations, demonstrating the scale of the corporate real estate correction underway.
“they uh, they take like a $2 billion charge last quarter just just on office consolidations.”
Brookfield has recently acquired interests in semiconductor foundries (through a deal with Intel) and the music licensing business, showing the company's ability to enter new sectors.
“recently they did a deal with Intel to partially own foundry that they're going to set up together. Um, so and they've also now entered the music business, you know, the music licensing business uh, and such.”
US inflation has been surprisingly benign relative to all the money pumped into the economy, with the unemployment rate remaining very low and the economy operating at full capacity.
“the inflation is still pretty benign relative to all that. Uh the unemployment rate is unbelievable. It's the economy is cranking really well.”
For Apple and similar mega-cap tech companies, Pabrai can see them doing well for 10 years but cannot confidently project 20-30-40 year outcomes required for mega-cap investment valuations.
“I don't think I can see anything on the radar that's going to affect Apple for 10 years. I think it's just a great franchise, it'll keep going. I don't know if I can make that statement for 20 years or 30 years or 40 years. I can make it for 10 years. But when you're trying to buy Apple at the 2 trillion, whatever it's at, you need to have a view 15, 20 years out.”
Ferrari and Hermes are businesses where Pabrai has high confidence they will be operating successfully 20-40-80+ years from now, unlike tech businesses with uncertain futures.
“I know that Ferrari will be cranking 15, 20 years from now. I know Hermes will be cranking 20 years from now, 40 years from now, 80 years from now.”
Pabrai discussed with Charlie Munger the longevity of Berkshire Hathaway businesses, suggesting that the railroad business will likely remain intact and essential for moving goods 100-200 years from now, representing an nearly indestructible moat.
“I was having a discussion with Charlie a few months back where I told him that, you know, if I look out 100 years or 200 years, um I think the railroad in Berkshire will be intact and doing great. Uh even if we get to maglev or some new technology, the the right of way and the need for humans to move goods, um that's probably the most efficient way to move goods. So, that that moat is almost a, you know, indestructible moat.”
Between Microsoft and Apple, Pabrai would be more interested in Microsoft because Microsoft's enterprise business is more durable than Apple's consumer-driven business.
“between the two businesses, I'd be more interested in Microsoft than Apple. And one of the reasons is that... Microsoft's business is a lot more enterprise driven. And so, to me, that has more resilience uh than a purely consumer driven business that that Apple has.”
Pabrai has mental blocks around large market cap businesses (500B-2T+) that limit his ability to invest in them, specifically related to the law of large numbers and the low historical survival rates of mega-cap companies over long periods.
“One of the one of the mental blocks I have, which probably hurts me more than than it helps me, is the law of large numbers. So, when you look at when I look at businesses, you know, 500 billion, trillion, 2 trillion market caps, uh which are the highest they've ever been for any business in the history of mankind. And then when I look at, you know, how many businesses, large businesses, like that survive for 100 years, 50 years and that sort of thing. Um you know, uh the death rate is really high.”
IEX is expected to grow from 8% market share to 25% or more market share in 5-10 years, while per capita power consumption remains low and is expected to increase significantly with EV adoption and rising living standards.
“India's per capita power consumption today is really low. There's the movement towards EVs and all of that. So, they think power usage will go up a lot in India. It'll go up. So, Indian GDP is expected to go up like 6, 7% a year. Power might go up 8, 9% a year.”
Pabrai doesn't need to have an opinion on 98% of what goes on with Adani because he only needs an opinion on things he's actually going to invest in, making the Adani questions irrelevant to his decision-making.
“I don't need to have an opinion on 98% of what goes on. I only know have opinion on uh stuff that we were actually going to invest in. So, it's really irrelevant from from my point of view, you know. We We We'll buy some popcorn and watch the movie.”
Pabrai describes himself as a lazy guy who doesn't want to serve on boards or tell companies what to do, because he believes the Raysas management team can run the business better than he ever could.
“I'm a lazy guy, uh Divya. You know, I I really don't want to serve on boards. I don't want to be telling uh company I mean, the the management team at Resaas uh can run circles around running that business better than I ever could.”
Most investors don't get to make pure pristine bets without complications ('hair')—even high-quality businesses like Meta have both very great aspects and not-so-great aspects that need to be weighted rationally.
“the more rational we are in looking at those factors, uh probably the better uh decision we end up making. Yeah, Monish, the interesting thing about you is that you're known for um taking pretty concentrated bets, and uh you're also known for holding on to positions without any kind of like um hardline or bright-line cap in terms of, you know, a lot of times people are, "Oh, well, this stock's now 10% of my portfolio, I better sell it so it's back down to 5% or something." Like as far as I understand it, you're not of that school of thought.”
Raysas' assets and revenue are automatically inflation-indexed because a warehouse is made of steel, iron, concrete, cement, and land—all of which move with inflation—and many of their leases are also inflation-indexed (with some in dollars or euros).
“the asset was automatically inflation indexed because a warehouse is steel, iron, concrete, cement, land. All of these things are going to move with inflation. And and so, basically, there's and you know, their rents are inflation indexed as well. And some of their leases are in dollars or euros.”
Pabrai believes you could put Brookfield, Blackstone, KKR, and Apollo in a basket and all of them would do well due to the oligopoly nature of the alternatives-asset-management business.
“I think you could probably buy a basket of these and do well. Uh, I think if you bought Brookfield, Blackstone, KKR, uh, Apollo, all of them, if you just put them all in a basket and bought them, they would all do well.”
Adani is optically and otherwise very expensive, has always been expensive, making it difficult to justify the valuations, which is the first thing the Hindenburg report identified.
“it's clearly optically and otherwise, it's very expensive. It's always been expensive and so it's difficult to justify uh those numbers. And uh so even the Hindenburg report, they start off the first thing they say is valuation, you know.”
The Turkish Coca-Cola bottler's management team and corporate family are among the highest quality in Turkey, owning three listed businesses: the Coke bottler, a beer business with 50% market share, and a dominant supermarket business.
“the promoter of the business in Turkey is one of the highest quality uh families and management teams in Turkey. They have two other listed businesses. They have a beer business, which they have 50% market share. They have very dominant supermarket.”
TAV Airports operates 15 different airports across 8 countries and represents a fascinating and complicated business, like 10 businesses in one, but with very favorable economics if you don't overpay for the operating rights.
“Tav is a uh another wonderful business. They have uh 15 different airports in eight countries. And the airport business is a is a fascinating business. It's a complicated business, actually, because it's like 10 businesses in one.”
Approximately 1% of the value of power flowing through the Indian Energy Exchange becomes IEX's revenue, and approximately 70-80% of that revenue becomes net income at the bottom line, resulting in extraordinary margins.
“And approximately 1% of the value of that power uh is their fees, their revenue. And about 70, 80% of that is just drops the bottom line.”
The private equity world, because of competitive pressures, has historically not maintained high filters on business quality, with firms believing they can buy mediocre businesses, apply financial engineering, and still make good returns.
“the private equity world, generally speaking, because it's so competitive, uh, did not has not recently and even historically as had very high filters on the quality of the business. They always felt that they could buy a mediocre business, you know, do some financial engineering and still make a good return.”
Guy Spier visited IEX and told the management that the company's profitability visibility to regulators is a concern because the high margins are obvious, potentially inviting regulatory interference.
“Guy's Guy's telling them, "Is there a way you can hide the profits? You know, is there a way you can not show the profits on your on your income statement because your regulator can see them. You know, you can see what what kind of amazing bootstraps you're running."”
Turkish Coca-Cola bottler has similar business economics to Coke bottlers in Europe, the US, or Latin America, and should be valued similarly unless Turkey introduces capital controls or similar extraordinary restrictions.
“when we look at the the Coke bottler in Turkey and you look at another Coke bottler, you know, in Europe or in somewhere in the US or Latin America, uh they're a they are very similar businesses. Uh they have very similar economics. And unless Turkey did something strange like, you know, put capital controls or something else, uh these businesses should be valued very similarly.”
Brookfield may do better than Blackstone, KKR, and Apollo primarily because of DNA differential—Brookfield's origins in core investing and long-lived infrastructure assets give it different strategic DNA than private equity firms that originated from LBO backgrounds.
“Brookfield, uh, may do better than the rest mainly because of the DNA differential between them.”
Indian Energy Exchange and the Gas Exchange are viewed as national assets by Indian regulators, who appreciate that under different leadership and ownership the businesses would not achieve such exceptional financial results, providing protection from excessive regulation.
“the regulators uh really love IEX and IGX. And they really look at it as a national asset. And I think that part of the reason they do so well and they put so much to the bottom line is just how how well the business is run. And I think the regulators understand that under different leadership and ownership uh they would not have those numbers.”
Raysas' market cap has grown from $16 million to $250 million over roughly 3.5 years (in dollar terms), while the Turkish lira has depreciated from 5 lira per dollar to approaching 19 lira per dollar (representing 75% currency depreciation), but Pabrai notes that this FX loss was irrelevant because the asset is automatically inflation-indexed.
“Resaas has gone from the 16 million to the 250 odd million in dollars over the last three and a half years... The lira was five lira to the dollar when I invested. It's now approaching 19 lira to the dollar. So, we lost 75% of value in the lira... It was not relevant to me because I knew that the asset was automatically inflation indexed”
The 8% of power currently flowing through IEX is expected to eventually grow to 15-30% of India's total power consumption as India's power market liberalizes.
“That 8% of power that's going through is probably going to end up somewhere between 15 and 30%, 15 and 25 and 30% of the entire country.”
Apple has significant goodwill and trust among consumers but faces animosity from App Store developers who believe the 30% take rate is too high, making the App Store a negative for overall business durability.
“Apple has a lot of goodwill amongst the consuming public. You know, a lot of trust, great brand. But it doesn't have the same uh kind of nuance with, you know, all those companies in the App Store giving giving them the 30% and all of that. So, there's animosity with that group. And uh Amazon, for example, doesn't have that animosity. You know, all the enterprises that work with Amazon don't have a negative view on the company.”
Microsoft's enterprise business provides more resilience than Apple's consumer business because enterprises are less likely to abandon their software platforms for new computing paradigms.
“Microsoft's business is a lot more enterprise driven. And so, to me, that has more resilience uh than a purely consumer driven business that that Apple has.”
In one of Pabrai's funds (the offshore fund), Turkey investments (Raysas and TAV Airports) collectively made up about half the fund due to appreciation, not because he intentionally allocated 50% to them, and he has told investors that even if it reaches 80%, he does not plan to lighten up.
“in one of my funds, the offshore fund, um there are two bets in Turkey that collectively um made up about half the fund. Not because we put half into it. I mean, one was Raysas, which went up, and the other was uh TAV Airports... even if it gets to 80% in these two stocks, we don't plan to lighten up.”
Pabrai is interested in TAV Airports as another potential 20-year holding, noting that TAV has an extremely high-quality management team and is an exceptional business, with the main risk being that when new airport concessions come up for bidding, competitive pressures can cause bidders to overpay.
“is this is this is another airport or asset that you could see yourself owning for 20 years? Again, uh, extremely high quality management team... I thought it was an exceptional business. Uh, the risk you run with airports is animal spirits. So when when some new airport comes up for bid, if it gets compared and people are not willing to lose it and they overpay, then it's not going to work well. So that's always a risk with TAP”
One of Pabrai's biggest mistakes was selling Ferrari after it had appreciated significantly in his Fiat Chrysler position, despite understanding that Ferrari had exceptional business characteristics with higher prices driving greater demand.
“one of the dumbest things I did was Ferrari looked optically expensive to me. And and I sold and and we would probably have three times that amount of money if I just kept the position.”
The future of human-computer interfaces is unpredictable and moving toward wearables, cloud-based computing, and mixed reality, creating major uncertainty about where Apple fits in this technological landscape.
“is I mean, there there is a unpredictable direction that we will be heading to at some point. Okay? And when we head in that direction, it is a big unknown where Apple fits. Okay? Uh it may well fit in and it may may not fit in. We don't know... a lot of it goes into the cloud, some of it is with us and some of it becomes wearable or whatever else, where that whole thing sorts out is unknown”
IEX will be forced to divest its position in the Indian Gas Exchange down to 25% within 2-3 years and will do an IPO of the gas exchange, which is expected to have a market cap that matches or exceeds the entire IEX business in a few years.
“they will be forced to divest their position down to 25% in a couple of years, two to three years. And so, they'll do an IPO of that. And the market cap of that in a few years probably going to match or exceed what they have for the whole whole business.”
The iPhone is a clunky device that will eventually be replaced with more advanced human-computer interfaces (like Mark Zuckerberg's metaverse vision), creating long-term technological uncertainty for Apple's business model.
“So, if you think about the iPhone, um you know, it's actually a very clunky device. And and you know, this is kind of where Mark Zuckerberg is going, too. So, the iPhone, you know, most of us don't really particularly care about the phone part of the iPhone, you know, that's really irrelevant. It's really a computer we carry around, right?”
Insurance, Apple, See's Candy, and other Berkshire businesses are harder to confidently project forward 100 years, making it uncertain whether they'll be around in the distant future.
“insurance, Apple, uh you know, whole bunch of other businesses, See's Candy and others that Berkshire is in, hard to make a statement that they'll be around 100 years from now. They will, maybe, but I don't know.”
Several issues with Alibaba would fall into the 'too hard pile' from an investment perspective due to difficulty in predicting what the Chinese Communist Party will do with the company.
“a number of things with Baba would, in my opinion, for me would fall into the too hard pile. So, it's very hard to handicap uh you know, what the CCP does with them.”
A lot of App Store developers believe Apple's 30% take rate is too high for the value Apple adds, making the App Store not a win-win business model.
“A lot of the App Store developers believe that the 30% is too high. And and they they think for what they add was what Apple adds. So, it that part of the business is not a win-win in my opinion. I think they take rate is too high.”
Tencent differs from Alibaba because it has always been very cooperative with the Chinese government and has maintained excellent government relationships, whereas Alibaba's relationships with the CCP are less favorable even after fixing many issues.
“Tencent is a little bit different in the sense that they've always been the you know, they've been very cooperative with the government. They've had very great relationships with the government. And uh I think Baba, for the most part, from what I can tell, has fixed a lot of those issues. But uh I don't believe their their relationships with the government is as good even today.”
Pabrai has an investment in the Indian Energy Exchange and owns approximately 1-1.5% of the company, which he considers one of the highest-quality businesses he has seen anywhere in the world.
“we have an investment in in an Indian Energy Exchange. Um and uh I think we own like 1 or 1 and 1/2% of the company. Uh and and I think it's one of the highest quality businesses um I've seen anywhere in the world.”
IEX with a complete monopoly position growing from 8% market share to 25% market share in 5-10 years represents an exceptional business opportunity.
“with a complete monopoly position where they are at 8% of the pie today and it becomes 25% or something in 5 or 10 years um that's an exceptional business.”
Almaty airport has no competition (it's landlocked Kazakhstan's gateway airport) and Kazakhstan has high per capita income, making it an asset purchased at 3x cash flow that should trade at 30-40x cash flow based on comparable airport valuations.
“It has no competition. And Kazakhstan is landlocked. It's actually got a very high per capita income. Uh, I mean, basically it's an asset that was purchased for three times cash flow. And, uh, airports like that should trade at 30 40 times cash flow.”
Raysas has moved into a number of different businesses beyond their core real estate operation, starting small, getting competence, and then achieving scale in those businesses through their creative and disciplined approach.
“They've entered a number of businesses in the past which they weren't in. They start small, get competence. And so, they've, you know, moved into a number of different businesses, and they've gotten scale in those businesses.”
Pabrai didn't value Raysas' other business operations beyond their core real estate business because those were harder to value, so the valuations he provides are conservative and based only on the real estate business.
“I didn't even value all those other businesses because those were harder to value. All the numbers I gave you is just for their one real estate business.”
In 15 years of holding Raysas, Pabrai hasn't seen the management do anything dumb—only 'one smart thing after another'—and believes they are much smarter than he would be if running the business.
“I haven't seen them do anything dumb uh in 15 years. You know, I just see one one smart thing after another. And they're much much smarter than I would have done if I was running it.”
Pabrai still owns the Raysas position and hopes to go to his grave with it, indicating a permanent holding intention.
“Do you still own the third of Resaas? Is that roughly kind of your stake at this point? I hope I go to my grave with it.”
The Turkish Coca-Cola bottler also has the ability to raise prices to keep pace with inflation, so Pabrai doesn't expect inflation to have a significant detrimental impact on that business.
“when I look at the Coke bottler, you know, they have the ability to raise prices, you know, to keep it locked up with inflation.”
Raysas is run by a father-son management team that is extremely smart about reinvestment, with reinvestment hurdles set at 25-35% IRRs, and they don't want to make investments unless they get their money back in dollars within 2-3 years.
“the father-son team that run the business, they really don't want to make investments if they're not getting the money back in dollars in 2 or 3 years. And so, their reinvestment hurdles are 25 35% IRRs.”
Amazon has incredible DNA with exceptional management, and under Andy Jassy (who like Pabrai is not a fan of retail ownership), Amazon is moving toward deemphasizing lower-return retail businesses.
“the DNA of Amazon uh is just an incredible DNA and uh and uh and under Jassy, you know, I've I've always not liked their um retail business where they take ownership of the products. You know, that that business I I've always hated retail and and stuff and um he seems to think like that, too. He's not a big fan of that business.”
Indian Energy Exchange has extremely good management and execution, demonstrates very creative approaches to business, and has reached a position where 8% of all power consumed in India flows through their exchange.
“extremely good management team uh very creative uh and uh and extremely good execution. And uh even when I bought it, I mean, one of the one of the things... before the pandemic, I owned 4.99% of uh Indian Energy Exchange... And uh so, today, for example, about 8% of all the power that is consumed in India is going through IEX.”
Apple is a great business with strong consumer operations but Pabrai wouldn't want to make a bet on Apple at current valuations due to his inability to project confidence 20+ years out.
“Apple's great business. I think 10 years like I said, I don't see anything. Might be doing well in 20 years. But I wouldn't want to make that bet.”
TAV acquired Almaty airport for $400 million plus another $250 million for capex (new terminal construction) during the pandemic when air traffic was near zero, and the airport is expected to generate north of $200 million in annual cash flow by 2026 with 5-7% annual growth thereafter approaching perpetuity.
“deal, which got done when there was no traffic, uh, there was a $400 million to for the airport and another 250 million for the capex. They're building a new terminal. Just that airport alone in 2026 or something is going to be cash flowing north of $200 million a year. It's going to be increasing that cash flow close to 5 or 7% a year from there on almost to perpetuity.”
The Turkish market has many cities and countries offering value opportunities, but Pabrai hasn't found any other markets with the extreme characteristics that Turkey currently has.
“I find the whole world is very heavily picked over, you know, so so it's uh it's difficult to find I think that um I haven't found any market with the characteristics that Turkey has.”
Pabrai switched his Alibaba position to Prosus (a Tencent investment vehicle) after studying both companies and finding significant differences in business quality and leadership between them.
“I switched the Baba position to uh Prosus which is basically a Tencent the Tencent bet. Um I had I had studied Baba and then after that I studied Prosus. I actually studied Tencent. And I just found there was a big difference in business quality and and leadership.”
Even though the Indian Gas Exchange is smaller than the Power Exchange, approximately 2/3 of the revenue from the gas exchange already becomes net income pre-tax, and this ratio is likely to improve to 80% as the business scales.
“even though the business doesn't have the scale of the power exchange uh something like 2/3 of the revenue is net income pre-tax. Um and that 2/3 will probably go to 80%.”
Pabrai is aware of the Adani Group scandal/fiasco but notes that Indian mutual funds (excluding index funds) and value investors he knows have never owned Adani companies despite them being a large portion of the market.
“Indian mutual funds, by and large, other than the index funds don't own Adani. Uh don't own any of the Adani companies even though it's a very large portion of the market. Um more I don't know any investors, value investors, any investors I interact with in India who ever had any stake in Adani.”
Adani owns very high-quality assets (most private airports in India, ports, petrochemical infrastructure, pipelines, transmission lines), but questions and allegations surrounding the company make it irrelevant to Pabrai's investment decision.
“the quality of the businesses and the quality of the assets they own is exceptional. Uh they they they they own most of the private airports in India, um ports, and uh you know, a lot of the uh petrochemical infrastructure, pipelines, uh transmission lines and so on. These These are really very high-quality assets. Um but, you know, the questions are swirling around the rest of it.”
Turkey is difficult to access for most investors, requiring a prime broker relationship (like UBS) for institutional investors, though retail US investors can access Turkish equities through Fidelity's international desk with higher fees (~$80-90 per trade plus FX conversion fees).
“Turkey is difficult to access. Uh you can access it if you have a prime broker relationship. Uh you know, we use UBS... For retail investors in the US, uh there is only one way that I'm aware of to invest in Turkey, which is through Fidelity... you can call their international desk and kind of place trades on the phone with them. And they have it's higher fees. I think it's $80 or $90 per trade and there's like a, you know, FX conversion fee”
When evaluating Brookfield's valuation, it's not optically cheap and none of these alternatives firms are optically cheap, but if you look forward and believe the management's guidance, it offers good value.
“Well, I think I think it's not optically cheap. Uh, none of these guys are optically cheap. Uh, they're not expensive either. Uh, but I think I think if you if you look forward, so you know, if you're a if you're a sovereign wealth wealth fund”
KKR and Blackstone have recently moved toward Brookfield's approach of prioritizing asset quality, though Pabrai believes Brookfield has had this DNA from day one.
“I think the KKR's and Blackstones of the world have moved towards Brookfield in the way they think about it. Uh, but I think that when I look at just, you know, long-term DNA of how these companies think, I just think that Brookfield just from day one had the right DNA.”
Pabrai previously owned the maximum 4.99% of IEX allowed by the Indian government for foreign investors before the pandemic, having paid 30-40x earnings for the stake due to the exceptional business quality.
“before the pandemic, I owned 4.99% of uh Indian Energy Exchange which is the maximum the government allows foreign investors to own. Uh and I paid up. I paid up significantly 30, 40 times earnings for that stake because the business quality was so high.”
Pabrai has an investment in Brookfield, describing it as a very high-quality business with a very high-quality team, but noting that he doesn't expect upside comparable to Turkish investments like Raysas.
“we have an investment. Uh, I don't think we uh, we have anywhere near the upsides we have in places like Turkey a company like Brookfield.”
The CFO of the Turkish Coca-Cola bottler is Ukrainian, previously worked in Atlanta for Coca-Cola, and later worked in Delhi for the Pepsi bottler, having been 'all over the place' in terms of experience with global beverage operations.
“The CFO of the Coke bottler used to work in Atlanta for the Coca-Cola company. He then worked in Delhi for the Pepsi bottler. I mean, he'd been all over the place. He's actually Ukrainian. He's not not Turkish.”
When Pabrai initially made his Raysas investment, the market cap was $16 million, which made it difficult to construct a 10% portfolio position without being at least a third owner, so he ended up owning about a third of the business for $7-8 million invested.
“the day I met them for the first time, uh the market cap was $16 million. Um so, no matter what I tried to do at that time, we were managing around million. And I ended up uh by the time I finished buying the position, I ended up owning about a third of the business for $7 million that we invested, 7 or 8 million.”
IEX started the Indian Gas Exchange about 2-2.5 years ago, and it has already achieved traction where approximately 5% of all natural gas consumed in India is flowing through it.
“They started a second business the Indian Gas Exchange which really shocked me in terms of their traction. So, they just started the gas exchange about 2 years ago, 2, 2 and 1/2 years ago. And now they're hitting some months where 5% of all the natural gas consumed in India is running through the gas exchange servers.”
Turkish Coca-Cola bottler trades at barely double-digit multiples currently (as of the conversation), whereas it was trading at 4-5 times cash flow less than a year prior, representing a significant valuation compression.
“the Coke bottler uh basically, you know, trades at uh barely hitting double-digit multiples now, and it used to be less than half the price a year ago, trading at four five times uh cash flow.”
IEX and IGX are really good businesses with exceptional management, and Pabrai is looking at ways to increase his stake in IEX.
“it's just a really good good business. And uh uh yeah, I I am looking at it again to see if we should increase our stake.”
Pabrai was not able to predict the 2008 financial crisis despite living through it and absorbing the full brunt of losses, but did successfully sidestep the 2000 dot-com bubble.
“I would probably be a really bad person to make those types of calls. You know, I never saw 2008 coming either, you know. I did see the bubble in 2000 before that happened. So, I was able to sidestep that one. But I I took the full brunt of '08, '09.”
Raysas' market cap has grown from $16 million at initial investment to around $250-300 million at the time of this discussion (post-earthquake), while its liquidation value has grown from approximately $600-700 million to over $1.5 billion.
“now Raysas uh since then, I mean, now that the with the earthquake, it's dropped a little bit, but it's uh you know, hovering around 250, 300 million uh now... their liquidation value, which used to be about, you know, 6 or 700 million when I was making the investment, is probably north of 1 and 1/2 billion now.”
Munger's $35,000 initial investment in Belridge became approximately $1 million in 1979 when sold, which he then invested in Berkshire Hathaway at approximately $300 per share, and this has grown to close to $500,000 per share today, resulting in an approximately 1,500X return on the Berkshire portion alone, with total wealth growing from $35,000 to about $1.5 billion.
“he then proceeded to put into Berkshire uh at approximately $300 a share, which is now close to 500,000 dollars a share. That's about a 1,500X. And um and so uh the million uh today is about a billion and a half. And so the 35,000 became uh about a billion and a half. It's about a 45,000X uh over that period.”
Japan has been attempting to address its demographic challenges by adopting more liberal immigration policies and bringing in more people to offset population decline.
“In Japan, there's been an attitude change towards immigration. They're trying to bring in uh more people.”
Charlie Munger purchased 300 shares of Belridge Oil (a pink sheet stock) for $115 per share in 1977, which represented about 10-15% of its liquidation value, for a total investment of about $35,000.
“Charlie said, "I'll take it." It was a very thinly traded, you know, pink sheet stock. And that was about $35,000, and he made that investment.”
Belridge Oil had a market cap of about $115 million in 1977, and Shell Oil acquired it in 1979 for $3.6 billion, representing approximately a 30X return plus fat dividends collected over a couple of years.
“Belridge had a market cap of about 115 million dollars uh in 1977. And 2 years later, '79, Shell Oil bought the company for 3.6 billion. It was about a 30X uh plus the very uh fat dividend uh that he collected for a couple of years.”
Shell Oil has pumped out and collected more than $60 billion from the Belridge Oil field since acquiring it in 1979, and the field is still producing oil and remains a prolific asset.
“Shell has pumped out and collected more than 60 billion dollars from that oil field since '79 buying it, and it's still pumping. Uh it is still uh producing oil for them. So it's a very prolific field.”
Munger owned perpetual rights to the Belridge Oil field, meaning they owned the oil field into perpetuity without time limitation, which was very unusual for oil field holdings.
“this was an oil field that actually they owned all the rights, which is very unusual. They owned it into perpetuity.”
Coca-Cola owns 20% of the Turkish Coca-Cola bottler (Coca-Cola Icecek) and sits on its board, demonstrating both ownership stakes and governance oversight in the business.
“Coke owns 20% of that business and they sit on the board uh uh of that company.”
Pabrai wishes Congress would fix US immigration policy to attract the best talent from around the world, as this would strengthen the US economic advantage.
“I wish I wish Congress would get its act together and fix immigration and so on. Uh and get the country to get the best of the world coming into the US”
Pabrai took a loss on Alibaba and used that loss as the trigger to switch positions to Prosus/Tencent rather than buying back Alibaba (tax-loss harvesting strategy).
“And uh so, we had a we had a a loss in Baba and so, instead of taking the tax loss and buying it back, etc. I took the loss and just switched it over.”
Pabrai has always liked Bruce Flatt, Brookfield's CEO, and believes Brookfield will 'do fine' under his leadership, suggesting confidence in the company's strategic direction.
“I think it's a very good team. I've I've always liked Bruce Flatt a lot. And, uh, so yeah, we have a stake and, uh, we think, uh, they'll do fine.”
Pabrai has kept his Prosus position, indicating continued conviction in the Tencent investment thesis.
“And you've kept your position Yeah, yeah, for the most part. Yeah, we kept the Prosus position.”
Raysas' position has moved from roughly 2% of liquidation value at initial investment to approximately 20-25% of liquidation value at current valuations.
“So, uh it's no longer at 2% of liquidation value. Uh it's probably more like maybe 20, 25% of uh liquidation value, something like that.”
At the time Pabrai owned the Ferrari stake, his fund owned something north of 1% of Ferrari's total value (about $60-80 million of Ferrari equity out of the $6 billion market cap), through his Fiat Chrysler position.
“a Bryce funds owned uh something like something north of 1% of Ferrari. Uh when I looked through the Ferrari stake.”
Pabrai has a good relationship with the Raysas founders and they visited Omaha for the Berkshire Hathaway shareholder meeting on Sunday, which Pabrai hoped would help them understand Berkshire's philosophy.
“I have a good relationship with the with the founders. And in fact, last year they came to Omaha for the Berkshire meeting on Sunday, which was excellent. I I thought that might uh uh help them in their journey to understand Berkshire more.”
The missing death toll from the Turkey earthquake will eventually approximate the official death toll, and Pabrai's friends in Turkey estimate the missing numbers could be as much as 100,000.
“uh you know, we keep seeing the death toll rise, but what they don't report um is uh the number that are missing. And the number that are missing uh will unfortunately eventually approximate uh the actual death toll. Uh I mean, we're going to see some miracles and I hope we see a lot of miracles. But you know, it's been more than 3 days. And uh so as the time goes by, um and the missing uh my friends in Turkey tell me could be as much as 100,000.”