In this interview with GreenHaven Road Partners Fund, Mohnish Pabrai discusses investment strategies amid market uncertainties, emphasizing Berkshire Hathaway’s approach of building cash reserves to capitalize on potential market dislocations.
He highlights the value of stock picking over broad market indices like the S&P 500, noting that exceptional opportunities exist even in frothy markets.
Pabrai observes the current barbell market, where some assets surge while others are left behind, and reveals his concentrated investment approach. His portfolio is heavily weighted, with 70% allocated to three Turkish stocks and 25% in coal, reflecting a focused strategy on undervalued opportunities.
Here’s an excerpt from the interview:
Pabrai: I mean, I think Berkshire probably, you know, building that dry powder. He may have some views that things are a little frothy, but they may actually get a chance to put 100 billion or more to work on something. He said, I think he made a comment that market dislocation will happen. He said he doesn’t know whether it’ll happen next year, but he thinks the odds in 10 years are high, for example. I mean, that’s a comment he made.
So that’s, I think, how I think about that from my point of view.
I mean, I’m a stock picker, so I don’t really particularly care about where the S&P is at because I’m not buying the S&P and I’m not buying the Magnificent Seven and so on.
But I think that, yeah, there’s always a world with 50,000 stocks and all these individual things going on with individual companies. There’s always going to be exceptional opportunities. I think if someone is just willing to dig, even in the most frothy markets, there would be opportunities.
And especially now, we have kind of this barbell-type market where, you know, a lot of it is left behind and a few things are kind of raging on. I don’t find a lot of things, but I find enough things to invest in.
We don’t have too many buckets. If I look at our billion or so under management, you know, it’s the most weird allocation we have. You know, 70% or something is sitting in Turkey. Maybe another 20 or 25% is sitting in coal. So that’s—we’re at 95% now. And then the 5% doesn’t really matter, you know, not really relevant.
Within Turkey, basically, the 70% is in three stocks. So that’s the allocation we have right now, and I wouldn’t want it any other way.
You can watch the entire interview here:
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:
