Mohnish Pabrai - The Value of Continuous Learning

SPEAKER_1 (0:00)

Value Investing is more than an investment strategy. It's a fundamental way of thinking about finance.

Welcome to Value Investing with Legends, a podcast hosted by Tano Santos, the David L and LCM. Dodd Professor of Finance at the Hellbrunn Center for Gram and Dodd Investing at Columbia Business School. Our mission today is to promote the study and practice of Gram and Dodd's original investing principles, and to improve investing with world-class education, research and practitioner academic dialogue. In this podcast, you will hear from some of the world's greatest investors, their views on the investment management industry, how they develop their investment process and how they see the field changing over time. To learn more and to subscribe to this podcast, please visit gramandodd.com.

Tano Santos (0:50)

Welcome to a new edition of the Value Investing with Legends podcast. I'm your host, Tano Santos, the David and LC. Dodd Professor of Finance at Columbia Business School and the Faculty Director at the Helbron Center for Graham and Dodd Investing.

My guest today is one of the most original investors and, frankly, minds out there. A brilliant man, he arrived relatively late in his professional career to the world of investing, but what a career has been since then.

As head of the Value Investing Center, I have heard this story many times, one in which an investor reads the Italian investor for the first time or reads Buffet's letters or writings, and all of a sudden the world of investing until then obscure and complicated makes sense. This is also the story of my guest today, but obviously there's much more to it. Mohnish Pabrai, welcome to the Value Investing with Legends podcast.

Mohnish Pabrai (1:44)

Tano, it's a pleasure to be with you and I've enjoyed all the different sessions live and it'll be fun to do it on Zoom as well.

Tano Santos (1:53)

Okay, absolutely.

So Mohnish Pabrai needs no introduction, but he will get one, of course. He's the founder and CEO of Pabrai Investment Fund, which he started in 1999 at the peak of the tech bubble. We'll talk about that, of course. Mohnish is originally from India.

If I'm not mistaken, from Mumbai, at that extraordinary place. Is that correct? That's where you grew up?

Mohnish Pabrai (2:15)

That's right, Mumbai and Delhi.

Tano Santos (2:16)

Yeah, he came to the United States in 1983 to study computer engineering at South Carolina's Clemson University, where he graduated summa cum laude. After graduating, Mohnish worked in research and development at Telapse before launching his own successful IT consulting firm, TransTech, in 1991

He funded the company with his 401k account and $70,000 in his credit card. So a true entrepreneurial story. And barely a decade later, sold it for about $20 million.

By then, he had already founded Pabrai Investments. And for the next few years, he went on to build one of those records that is the staff of Legends. A long-only equity fund outperforming the index by more than 400, 500% in a few years.

Mohnish has written two wonderful books that I recommend. Mosaic, Perspectives of Investing, and The Dhandho Investor. You will have to tell me what Dhandho means. Does it mean business in Hindi?

Mohnish Pabrai (3:14)

It's actually a Gujarati word, which is another language like Hindi.

Tano Santos (3:17)

Yes, Gujarati, exactly.

Mohnish Pabrai (3:18)

So the direct translation, Dhandho means business, but the subtle meaning is endeavors that create wealth.

Tano Santos (3:28)

Oh.

So on that score, in 2005, Mohnish, together with his wife, Harina Kapoor, started the Raskana Foundation, focused on poverty relief in their native India. And I will want to talk a little bit about that, because it's something that I know you care passionately about, and you too, and it's obviously meaningful and important. So welcome again, and thank you for coming to the podcast. So as always, I want to start a little bit with knowing or getting to know you a little bit better. And I want to talk about your childhood education background, family background, and where does Mohnish come from, and where does this enormous gift for investing come from? So why don't you tell us a little bit about that childhood, those early studies before you came to the States, Mohnish?

Mohnish Pabrai (4:14)

I grew up in India and childhood was in Mumbai and Delhi. And I think a very important aspect of who I am today is because of my parents. My dad was, you can say, the quintessential serial entrepreneur.

And I saw him go into many, many different businesses. Sometimes he started businesses in industries that he had zero prior experience in. And almost across the board, they were all successful. They got going. His downfall was that he was an eternal optimist.