Mohnish Pabrai: The Holy Grail Portfolio

Johnny HopkinsMohnish Pabrai1 Comment

In his recent presentation at the TiE Austin Speaker Series, Mohnish Pabrai discussed his Holy Grail portfolio. Here’s an excerpt from the presentation:

Pabrai: One of the things that took me a long time to figure out like they say, old too soon and wise too late, is that basically the best… there’s a guy Thomas Phelps who wrote a great book – 100 to 1 in the Stock Market.

His book came out like 50 years ago. It’s still I think pretty timeless, but he said, that I think it was Phil Fisher who said that, he said that if the job is done right you never need to sell.

And I think that’s a great way to approach it is that if you can, I mean I think the holy grail is that if you can find yourself in the happy place of ownership of a great business that is compounding and growing at the long runway, and you never need to touch it, I think that’s awesome. It’s a great way to go.

And so I used to practice that in the 90s then I moved away because of the bubble and then what I should have done is gone back to that by like 2009, but I went back to that more like 2018, and so now I’m pivoting more towards where… I mean if I can get to the point where we have no buys, no cells and just coast that’d be great.

You can listen to the entire discussion here:

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One Comment on “Mohnish Pabrai: The Holy Grail Portfolio”

  1. “If the job is done right you never need to sell” stresses the importance of determining the investment merit before buying. Taking this one step further, as an intrinsic value investor, I believe that a significant part of my long term return is made on the day I buy. That is the date when my $100,000 in cash becomes $200,000 in assets. At the extreme, one of my areas of investment for around 20 years was buying unlisted real estate syndicates that could be bought for 50% or less of the appraised value of the real estate. Even if I held the properties for several years, the gain after I purchased was quite small. This business generated a 29% annual return over the period it operated. Of course, buying equities in good businesses, the gains after the purchase are also substantial, eliminating any argument for selling. In 2000 Cisco traded at around $80, but by 2011 I could buy it for $14 when I thought that the intrinsic value was over $30. Last year I did sell it for $62. In 2000 Micron traded above $90, but in 2015 I could buy it for $14.65. The intrinsic value appeared to be around $40. I may never sell it as the intrinsic value, now over $100, keeps growing.

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