MOHNISH PABRAI 00:00
I think, generally speaking, you don't want to bet on turnarounds. I think, you know, most turnarounds don't work, turnarounds don't turnarounds, if you will. So I think generally those are not good bets.
I think like for example when I invested in the auto industry in Fiat Chrysler, the industry was distressed but they had been structural changes to the industry which made the recovery almost for sure.
So I think you don’t want to be investing where you are making heroic assumptions about magic that management is going to do, I think that’s not a good idea. But I think you can make investments where basically – you're basically – you can see the tread marks to where this is going and where it’s going to end up.
So I think that industries do get distressed, even countries that get distressed like Turkey. But like for example, you know, if I looked at this cement business, you know, I can see how they’ve got flexibility where – I mean actually what’s happening in Turkey, the exporters are doing great and the other thing I noticed is that the local prices have not adjusted as much. I mean what is adjusted immediately had been the imports. Those are adjusted but things that are produced locally, they haven’t fully adjusted yet. So the exports are going to have a stronger advantage with the weaker currency.
And so you want to see obvious things when you’re going into these areas, you don't want to make heroic assumption about what management is going to do or what’s going to change. It should already be in place but it’s just that the market is missing it.
Don't invest based on heroic assumptions about the magic that management is going to do.