Collection: Mohnish Pabrai - #50 'Investment Business'


Video Link: https://youtu.be/nBtauHT0mYQ


In this episode, Mohnish Pabrai was asked how has running a fund helped him make investment decisions?


In this episode, you’ll learn:

  • Mohnish Pabrai thoughts on the investment business.

  • The difference between investment business and other businesses.

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

[Transcript]

(Source: https://youtu.be/dnS5xWIxo1I)

MOHNISH PABRAI 00:08

Well, I mean, I would said the investment business – you're talking about Pabrai Funds?


AUDIENCE MEMBER 00:13

Yes.


MOHNISH PABRAI 00:14

Yeah, so I would said the investment business is a little bit different than typical operating business. I mean, it does have some elements of that but it's on a simpler and smaller scale. I mean, you don't have you know large scale HR issues, large scale CAPEX issues. You know, you have some elements of running business.


I think that when I ran my IT services company, I probably learnt a lot more about running businesses of that than I did from running Pabrai Funds. I mean, I think Pabrai Funds – I think what I'm proud of in term of ways its run is how efficiently its run.


So you know, I – The entire workforce excluding me is part-time stay-at-home moms. And basically the world misprices and misjudges the talent capability of stay-at-home moms. And they are not in a position or interested in taking a full-time careers. But to think that all of them can only lick stamps is ridiculous.


But that's what the world does, they think that all they can do is, you know, $10 an hour part time job or something. And so what I found is that, you know, the stay-at-home moms – You know, I have people in the office who have very high flying careers in different areas and now we're able to give them lots of challenging work. They're pretty much running the operation on all facets of it including SEC compliance and so on so forth.


And so – And you know, we do it on a payroll that would shocked most people. I mean, I think that it's a – the Pabrai Funds part of it probably run at under a $100,000 a year in payroll excluding me, on assets of 700 million.


You know, so yeah you can run a few – you can learn a few things on running a business of fund, running a fund. But I think you can learn a little bit more if you have experience in an operating business which has a little more sides but I think it all applies.


I mean, I think that if you run a lemonade stand when you were a teenager and you know, [Inaudible] or any of those things. All of those things helped and add up. But if you get a little more sides and skills to what you're doing then that's even more helpful.


And yeah, definitely it's very helpful to then understand how CEOs of large companies might be running the businesses and what they keep front and center in front of them and what's likely the important factor to close this company?

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