Thanks to our friend at Above Average Odds, I have found this interview with Mohnish Pabrai by www.dnaindia.com. The write-up is entitled “’We Will never see another Warren Buffett’”, a direct quote of Mr. Pabrai in the interview. I found the quote pretty surprising as I always thought Mr. Pabrai aspires to become Warren Buffett one day.
Maybe he has put the idea in the “Too Hard” bin?
Jokes aside, it is a good interview and I highly recommend. I am intrigued by this dialogue on where Pabrai got his investment ideas:
You have said in the past that investment ideas come to you by reading a lot…
An investor should think of himself as a gentleman of leisure. Don’t think that you are in some profession. You just think that you are a person who is focused on enjoying and living life well. If you focus on yourself as a gentleman of leisure what is going to happen is that you do not feel any compelling reason to act. It has been several months since I have bought any new stock. And that is not a problem because we went through a period in December when we bought ten stocks. The first thing is that we are in a profession were you don’t pay for activity, you get paid for being right. So there should be no compelling reason to act. Basically, the thing you do is you take out the reason to act.
The second thing you do is you focus on acquiring worldly wisdom. I read an enormous amount of stuff and relate to what different investment managers who I respect are saying. So, at times, things become no-brainers.
In the fourth quarter of last year, when everything was going to hell, one part of the market that went to extreme hell was commodity-related stocks. Commodity-related stocks absolutely got crushed. 95% down. 90% down. And if you simply keep in mind that you look at the growth rates of India and China, you can get an insight.
Through our foundation Dakshina I spend a good amount of time in rural India. I can see nuances about India, that most people would not see. You can see that the pressure on the few commodities in the earth’s crust is tremendous.
So it explains his heavy investment into Canada’s Potash Corp. of Saskatchewan Inc.
As of June 30, 2010, these are his top holdings and ownership history:
No. 1: FAIRFAX FINL HLDGS LTD (FRFHF), Weightings: 13.54% - 97,106 Shares
Run by another Investment Guru Prem Watsa with Indian roots, Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims management. with a P/E ratio of 10.04 and P/S ratio of 1.17. The dividend yield of Fairfax Finl Hldgs Ltd stocks is 2.57%.
No. 2: Brookfield Properties Corp. (BPO), Weightings: 12.46% - 2,359,266 Shares
Brookfield Properties Corporation is focused on the ownership, management and development of premier office properties located in the downtown core of select North American markets, including: New York, Boston, Toronto, Calgary, Denver,and Minneapolis. Brookfield Properties Corp. has a market cap of $7.96 billion; its shares were traded at around $15.87 with a P/E ratio of 15 and P/S ratio of 3. The dividend yield of Brookfield Properties Corp. stocks is 3.5%.
No. 3: Harvest Natural Resources Inc. (NYSE:HNR), Weightings: 12.45% - 4,492,695 Shares
Harvest Natural Resources, Inc. is an independent oil and gas exploration and development company with principal operations in Venezuela and Russia. Harvest Natural Resources Inc. has a market cap of $242.5 million; its shares were traded at around $7.22 with a P/E ratio of 17.2 and P/S ratio of 1339.8.
No. 4: Potash Corp. of Saskatchewan Inc. (NYSE:POT), Weightings: 11.12% - 342,718 Shares
Potash Corporation of Saskatchewan Inc. is the world's largest potash company, the third largest phoshate producer and the second largest nitrogen producer in the world. Potash Corp. Of Saskatchewan Inc. has a market cap of $44.04 billion; its shares were traded at around $148.47 with a P/E ratio of 32 and P/S ratio of 11.1. The dividend yield of Potash Corp. Of Saskatchewan Inc. stocks is 0.3%. Potash Corp. Of Saskatchewan Inc. had an annual average earning growth of 31.7% over the past 10 years. GuruFocus rated Potash Corp. Of Saskatchewan Inc. the business predictability rank of 2.5-star.
No. 5: Cresud S.A.C.I.F. y A. (NASDAQ:CRESY), Weightings: 7.85% - 1,719,377 Shares
CRESUD SA-ADR is involved in the Agriculture. Cresud S.a.c.i.f. Y A. has a market cap of $742.3 million; its shares were traded at around $14.95 with and P/S ratio of 1.7. The dividend yield of Cresud S.a.c.i.f. Y A. stocks is 2%.
No. 6: Air Trans Service Group (NASDAQ:ATSG), Weightings: 7.54% - 4,209,387 Shares
Air Transport Service Group INC. is a provider of air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. Air Trans Svcs Groupinc Com has a market cap of $354 million; its shares were traded at around $5.55 with a P/E ratio of 11.8 and P/S ratio of 0.4. Air Trans Svcs Groupinc Com had an annual average earning growth of 14.1% over the past 5 years.
To check out Pabrai’s complete holdings, click: http://www.gurufocus.com/holdings.php?GuruName=Mohnish+Pabrai
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