Friday 14 November 2014

Dalal Street: Mohnish Pabrai Q3 2014

Dalal Street, Mohnish Pabrai

Mohnish Pabrai has yet again been active with not only kicking out companies from his stock portfolio but he has even decreased some holdings and brought in a new one!

The new investment was:

WL Holdings Corp - I could not find any homepage so sorry no link to that and the text concerning the company comes from Google finance "WL Ross Holding Corp. is a blank check company. The Company is formed for the purpose of effecting a merger or other business combination with a target company. As of March 31, 2014, the Company had not identified any business operation. As of March 31, 2014, the Company had not generated any revenues."

For the previous summary on Dalal Street please click on Dalal Street: Mohnish Pabrai Q2 2014.

Conclusion: I am worried about Mr. Pabrai and this is not a joke. He jumps into Posco and then he starts to decrease his position a quarter later with around -5%. Jumping into a blank check company that were created in end of March 2014 is really odd. The investment was not large (less than 600,000 USD) but still it is the principle of jumping into new companies without any track record that worries me. How does that fit with his, at least what he claims, list of points that a company must fulfil before he invest. I doubt it fits or he is now using a newly written list... either way it makes me uncomfortable.

1 comment:

Fredrik von Oberhausen said...

By the look of it Mr. Pabrai managed to get out of the Chesapeake energy investment 1,5 years before it went bankrupt.
I still find it amazing to discover that Mr. Pabrai was still adding into this position less than three years ago and now it is bankrupt. How can that be? How can one be so wrong even when following a long check list and being extremely careful. There are obviously never a guarantee that a holding is as solid as one expects when entering into it.