Collection: Mohnish Pabrai - #21 'Investment Gurus Are My Free Analysts'
[Transcript]
MOHNISH PABRAI 00:08
And so, you know one of the shortcut I have taken because again the data set is so large. Instead of being like John Arrillaga and just doing Stanford real estate. I said, why not be a shameless cloner? You know, all I am is a low life cloner which you would soon discover in all its glory.
But basically, so long-lived the SEC and long-lived 13-Fs which are the quarterly filings that institutional investors have to make. So one of the shortcuts I used quite a bit is I look at what the other great investors are buying.
And so, you know, if I make a list of lets say 20 great investors. You know, Berkshire, Longleaf, Seth Klarman, Third Avenue, you know David Einhorn and on. David Einhorn and so on.
You know, I have cut that universe of 50,000 stocks down to at the most a few dozen stocks. And if I especially look at what they bought in the given quarter, it might be down to you know, maybe a dozen stocks or less. So it's really narrow that huge universe down to a much more narrow universe.
And clearly, when people had made some certain positions their top holding or their top 3 holdings. Some great minds has processed it and gone to the point of actually, you know investing large sums into that position. And so then I can look at it and say, you know, do I want to do this or not?
So if I see that, you know, Berkshire Hathaway has taken a position in Exxon which they just did, you know, the good news is that Warren Buffett turned me down, but he doesn't realize that he's my analyst. And the best part is that he's my analyst at zero pay and just like I told him.
I told him listen just hang out in Omaha and when I need you, I'll reach out to you and usually I reach out to Warren on four days of the year. You know, on May 14th, August 14th, November 14th, and you know February 14th, those are the four days when Warren tells me what he's been up to. And so you know, I can then look at what he's been up to.
And you know, what's even great about Warren is I don't even have to do direct deposit, paycheck or anything. And he's never call to complain and the other thing that's really great about him is that I keep saying no to all these things, he comes up with and he never seems to mind.
And it's just wonderful and the same applies to like Ted Weschler who's also in Omaha hanging out just like I told him to. And Todd Combs and then you know, set time on hangs out in Boston with you guys and so on. You know and then we caught the Longleaf guys in Memphis. And all these guys are you know, hanging out doing exactly what I told them to do.
And you know four times a year they popped their heads and just you know, quietly tell me what they've been up to and then go away. They'll never get disappointed or dejected, if I don't take them up. And then in fact, as you can see in the last 17 months. all these guys are coming with all sorts of things that I've said no to everything and amazingly none of them ever mind. They are just fantastic humans, no emotional response to repeated rejections. It's fantastic.
And so I have found that, you know, the payroll cost is 0 which is a nice number, I like that. And you know, like the Miller, Miller commercial of sometime back you know; "not only that it taste great, it also less filling." You know, so it does both things at the same time.
And let's go to the next slide.
(Source: https://youtu.be/ot6pzc9ZwfU)
[YAPSS Takeaway]
Step 1: Create a list of great investors you like, look at 13-F on a quarterly basis to see what they invest in.
Step 2: Look at what they invest and find those companies that you can understand.
Step 3: Study those companies and invest when the price is right. :)
