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Collection: Mohnish Pabrai - #127 'Stock Watchlist'


Video Link: https://youtu.be/rFESX6tGl98


In this episode, Mohnish Pabrai was asked how many stocks are on his radar at any given time?


In this episode, you’ll learn:

  • What's the difference between Ben Graham and Charlie Munger?

  • Why Mohnish Pabrai think it is a good idea to have a stock watchlist?

To check out all Collection: Mohnish Pabrai <click here>

 

[Transcript]

(Source: https://youtu.be/jfxOvdiac94)

AUDIENCE MEMBER 00:00

(Stocks) Prices fluctuating every day. And you’re kind of watching, you want them to hit your value I assume, how many stocks are on the radar at any given time?


MOHNISH PABRAI 00:11

That’s not how I run my life. (Laugh)


So you know, the funny thing is that I always say this story that Ben Graham would go into a grocery store and he would look for what was the biggest discounted item and then he would buy that and come out. And Charlie Munger will go into a grocery store and he will look for what he loves and then he will keep going back every day till what he loves is on sale and then he’ll buy it and come out. And clearly the Munger approach is I think superior.


And so when I mentioned this a few months back at Columbia Business School, one of the students asked me exactly what you asked me, which is you know, do you have – somewhat differently than you ask me – do you ever think a list of things that you love that you’re watching?


And I felt very sheepish and telling him that I didn’t have such a list and then actually what I did after I came back is I said, you know what I’m going to prepare such a list because such a list is actually a very good idea.


So I put together and it’s not finished yet, I put together a list of businesses that I truly admire, really great businesses. Now, they may not likely be at prices that I’m interested in.


So I’m at the stage where I got – I would say probably I think that list will be a living breathing list, but I probably have 80-90% of what might come into it in the next year or two, for example, already on that list.


I haven’t gone through the motion of actually going through it versus present prices, what I was going to do is – one of the those things, either automated with the like of Capital IQ feed or something where I can pull triggers in, which is not my normal modus operandi or the second is that when there’s dislocations then go in.


And actually I missed one, so for example, February 8th, I was actually in India on February 8th, but February 8th was a great day to buy a few things because we had some – just for a couple of days when the indices really tanked and a lot of things tanked a decent amount.


And actually looking back there were things at that point at prices that I would like to buy now, but they’re not at those prices anymore and so I missed it. And part of the reason I missed it is because I wasn’t paying as close attention as I should.


So we will get there what you’re suggesting but I don’t want to spend my – it’s not my temperament to spend my days looking at screens. What I would prefer is to have that setup and maybe kind of once a week or something just take a quick look at, you know, how far off things are from being more interesting in terms of buy and so on.


And the second thing that I want to get better at which is part of the reason for the Coke presentation is that there are these businesses where they are fantastic businesses when they get paired with fantastic managers if the runways are big even at a not an obviously cheap price, those can be great things to buy.


And that’s a lesson that has not been seared in because I’m a bargain hunter and so I need to sear in the lesson that you pay up sometimes and then take it from there.

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