Video Link: https://youtu.be/KFI14_O4alY
In this episode, Mohnish Pabrai explain the differences between investing in the United States and investing in India?
In this episode, you’ll learn:
Armchair investing of Mohnish Pabrai.
What is the difference between investing in the U.S. and India?
What is Mohnish Pabrai investing approach if he is investing in India?
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MOHNISH PABRAI 00:08
Sure, I haven't – I actually – so the Indian market for me as a US investor. You know, [Inaudible].
I think the second is the Indian market are quite different from US market in one sense. In a sense that I hardly ever – basically almost never meet managements, I hardly ever visit businesses I basically, you can called me an armchair investor so I'm really not interested in.
So I'm really not interested in, you know, going and understanding the people by meeting them and all of that, In India, if I were to follow that approach I followed in US, I think I will get mad because you know, the opportunity – if I were investor who focus on India I would focus on businesses that had major growth ahead of them.
You know, businesses that I can do a 10x or 20x in 5 years or 10 years, you know, significant growth. There're many many areas in the India's economy that have that potential to have that growth. So it almost become like private equity investing or venture capital investing if you want to do that.
And so in fact, if I were investing in India, I would not want to [Inaudible] public market. I would want to be – I would have a fund that would allow me to do all Indian's market; private, public, real estate. Anything that I want to do. So I would set up a different structure.
And if I wanted to do that structure, I could not do it on armchair investing. I would have to be able to handicap the nature of management and all of that. And I'm able to do that in the United States because the business that I invested have a very long history. Management have very long history that in the United States.
I can make a – almost a difficult trade but the probability that I lost money on an investment because to fraud. It's pretty close to zero. In fact, I can't think of a single case from the past you know, 18 years of investment that I lost money on an investment because of fraud. I had lost money on investment because of my stupidity but not because of fraud. In India, I could not make that statement.
So there are plenty of very high quality entrepreneurs, there are plenty of low quality entrepreneurs. You have to sniff them out. So my biases are that I like to just sit on an armchair and my wife would tell you, he doesn't work at all. And I have no interest in, you know, kicking the tires and going and meeting businesses and try to figure out.
Basically, you know, the venture capital approach you have to forecast ahead without [Inaudible] months behind you. And that is just not a game that I either would be good at playing or even have an interest to play it.
So I think that the Indian's market, I have to move here to do that. And I have to do over here and be the only thing that I'm doing. So there are numbers of structure changes that I have to make that's unexciting for me to make.
So actually I have no Indian stock tips for you because I really not follow the Indian's market. But, I would suggest that you can do the same which is to the extend that Indian market requires us closure.
You should find out who the good investors are and look at what they are doing. So I can tell you some names of people I admire in India, I think [Inaudible] is very good, I think [Inaudible] is very good, I think that – I think probably they are the – [Inaudible] are very good. So these are the some names that I know about.
I think, you know, so if you are track some of these names. Probably, there are many more of them. Then that might be a good place to see what they are doing and then figure it out.