Mohnish Pabrai: There’s Always A Bear Market Somewhere

In this presentation at Columbia Business School, Mohnish Pabrai explains how historical crashes can create long periods of low stock prices, discouraging investors. However, these periods can also be the best times to invest for long-term gains. He believes there are always opportunities somewhere in the world, even if the US market seems overheated. Investors should consider looking at other markets to find undervalued stocks. Here’s an excerpt from the interview:

Pabrai: I mean I think if we go back in history with the US markets.

After the crash of 29 to 32 and then also the crash of 38 really stock prices did not even come back to the level of 1932 or 34 till the mid-50s.

The Dow was 400 then and 400 in 1954 or something. So there was a whole generation raised on the notion that stock market is not a place to make money because it did nothing for two decades.

And of course those are the types of conditions that set up the best conditions to do extremely well. And the US markets were an extremely good place to invest in the 50s and the 60s until we got to Nifty50 and all of that.

And then it became a really exceptional place to invest after the 73/74 crash. But then more recently I think things are kind of you can say overheated and such.

I don’t think it’s so much an issue of data and what’s available. So there’s always a bear market somewhere. There’s always opportunity somewhere.

So if you broaden your horizons, you look at other geographies you might find wide gaps between price and value even though in those markets there is incredible data available and incredible speed with which you can get that data and all of that.

You can watch the entire presentation here: