Collection: Mohnish Pabrai - #64 'India Stock Market'



[Transcript]

MOHNISH PABRAI 00:00

Well, I think the Indian market for the most part are outside my circle of competence.


And the reason they are outside my circle of competence because I'm not here. And the format I would – I mean, the type of work I would need to do to really understand many businesses would be similar to private equity investment.


Investing in these, you really have to look at management and you have to know a lot of other things, you need to be on the ground.


And you have to know a lot more, I would say a deeper understanding of things. A few things seeing within circle of competence. A few things and you know, it's hard to know exactly how the future unfolds.


But India had a – I would say you know, 67 years history of – I would say either leaders who had a socialist bent or a leader who had poor governance or both. Or you know, even when they were capitalists, they were not full hawk capitalists and so on.


So you know, we have a leader Modi, where there is a chance for very significant change.


And I've always felt that India for example, the – the government, you know if they did these two things, two or three things. One is get out of the way that will be the first thing. (Laughter)


Getting out of the way will be a great thing for the government to many, many places. Build out great infrastructures, build out great schools that will be a tremendous model. You know, get out of the way and focus on the things that government is about – meant to do. And there is some chance that may happen.


If we actually end up with those dynamics, then you could see significant GDP growth and significant growth in corporate profits and even revenue and so on. So you get a lot of tailwind in that case.


And so I think we've made a few bets where we think downside is very muted. And we think there is a – I mean, most of the bets we have are in banking. In general, banks will grow at a multiple of GDP. And so if the GDP growth is coming in then that will help.


And then sure you know India has a large [Inaudible] and such. I think there's lot of hope on that front. So those are some of the reasons and we will see how it works out.


(Source: https://youtu.be/oC_xjoUo89E)

 

[YAPSS Takeaway]