Investing is often thought of as a numbers game, ruled by ratios, charts, and forecasts. But in reality, the best opportunities often come from a place of discomfort—looking where others refuse to. As Mohnish Pabrai put it in his interview with the CFA in the U.K, “A good way to look at it is to try to focus on what is hated and unloved in the market. This is often a great starting point.”
This mindset took Pabrai on an unlikely journey to Istanbul in 2018, driven not by conventional wisdom but by raw data. “I had been analyzing data and noticed that Turkey was screening as extremely cheap,” he recalls.
The financial landscape in Turkey at the time was anything but inviting—soaring inflation, unpredictable monetary policies, and a crumbling currency painted a picture of imminent disaster. And yet, Pabrai saw something different: “The opportunity seems intriguing. I should visit Turkey and see what’s really happening.”
Rather than relying on distant analysis, he took a hands-on approach. He contacted a friend, a fellow investor with a deep value focus, and laid down two simple ground rules: “First, don’t take me to any company you haven’t invested in, and second, let’s go through the ideas in order, starting with the top pick and moving down the list.”
What he found was a market filled with anomalies—high-quality businesses unfairly punished simply because of their geography. “You don’t need many; just one or two good opportunities can make a difference. That’s what we were searching for: anomalies.”
These overlooked gems included dominant beverage brands like Coca-Cola bottlers and beer companies generating significant revenues outside of Turkey. Despite their solid fundamentals, their valuations suffered because they were listed in a country investors wanted nothing to do with.
Pabrai’s experience highlights an essential truth in investing: real opportunity often lies where fear and skepticism reign. The key, he suggests, is not following a rigid plan but staying open-minded. “There’s no grand strategic plan. You need to stay informed—read newspapers, keep your eyes and ears open, and review tools like Value Line or their equivalents.” The best ideas, he insists, come from places most investors overlook, not from conventional screens or consensus opinions.
The broader lesson? Markets are not always rational, and great investments are often found in places others abandon. Instead of chasing popular stocks at premium prices, investors should be willing to do the uncomfortable work—digging through the wreckage of beaten-down markets, looking for what others have missed. “You don’t need to find many—just one or two good ideas a year can make a significant impact.”
Pabrai’s approach is a reminder that investing is as much about courage as it is about intelligence. It’s about looking where others won’t and having the conviction to act when no one else will. And as history has shown, those who embrace discomfort often find themselves rewarded in the end.
You can watch the entire interview here:
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