Is it time to ignore all the market noise & concentrate on bargain buys? Watch Nigel D’ Souza in conversation with founder & managing partner of the Pabrai Investments Funds Mohnish Pabrai.
Was Ben Graham's big purchase of GEICO shares actually a value investment? Perhaps it was contrary to what many believe. "In 1948, we made our GEICO investment and from then on, we seemed to be very brilliant people." -- Benjamin Graham, 1976 Both Benjamin Graham and Warren Buffett can attribute a large part of their Read More
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Well Nigel first of all always a pleasure to hang out with you and congratulations on becoming a new dad. Thanks and you look pretty good for a guy who doesn't sleep at night. Well you know I think the thing is that you know Ben Graham one of his three core edicts that Buffett talks about is that the market is here to serve us not to instruct us. And so we should never be trying to kind of look for rationality in market levels or market prices. What we have to do with investors is. Effectively forget the market but look at individual businesses when they're being offered that offered at bargain basement prices we buy. And when they are being sold at ridiculously high prices we sell. Yeah and that's pretty much it. And we don't particularly care. About what's happening with Brent or what's happening with growth or what's happening with BFC all of those are in the noise range. We really don't care about those things.
No that's quite interesting because there's been so much noise and so much of our headwinds that we've been talking about simple point. Are you deploying money out of your total size of money that you're investing I think you manage it on eight hundred million dollars approximately how much of that is allocated to India. And are you buying most importantly.
In fact we we bought today we we bought some sizable chunks and we're buying every day. And I think out of the 200 about half roughly half is in India. And that number has been inching upwards for the last several years.
Okay so you're definitely buying into this correction you are deploying money into the Indian market.
And again like I said I don't particularly care about corrections and such. I think in general when we have situations like we have currently a number of businesses go on sale. Okay. And as long as. An investor can understand the businesses it's within his his or her Siglo competence and can buy them well below what they're worth.
That's the name of the game you should be buying at that point and ignore the noise while you're sitting away in California but you really are you know two three routes to India and you relate the markets to market. I believe that you derive some inspiration from our June focusing on the target. Is that something you're looking at.
That's right. So we are seeing that well we all know the story in the Mahabad about our journey and Drona Acharya and he has this test where he has to shoot to be the eye of the fish looking at the reflection in the pool of water. We all know that. And and when Arjun is asked why don't Acharya what do you see. He says I see only the center of the center of the eye of the fish and Acharya says you know fired well and and of course he shorts the eye out. And so the direct analogy there is. When we're looking at a specific business and we're looking at the future prospects of our business we really shouldn't deviate or take our focus on that into anything else that's going on. Okay so I'll give you a little you raised a very simple example. So when we had the unfortunate incident of 9/11 you know when the Twin Towers went down on us market imploded after that one particular company in the U.S. called Stewart Enterprises. Also went down. Like everything else right Stewart Enterprises buries dead people. Did the prospects of Stewart Enterprises suddenly deteriorate after 9/11. If people were concerned that they were going to be more airplanes flying into more towers as morbid as it sounds their business with a boom. And so there was no rational reason. I mean United Airlines should have gone down. American Airlines should've gone down. Stewart Enterprises should've gone up right. It didn't go. It went down as well.