Chances are you haven’t heard of Mohnish Pabrai — a former Indian software entrepreneur who has transformed himself into one of the world’s leading value investors.
Pabrai admitted that he had never heard of Warren Buffett until he was over 30. Today, Pabrai is one of Buffett’s biggest disciples.
In 2008, Pabrai even bid $650,000 to have lunch with the “Oracle of Omaha” in what he called his “best investment ever.” Buffett must have given Pabrai some good advice at that lunch, based on what happened next.
Since launching his funds in 1999, Pabrai handily has outperformed his idol. For instance, $100,000 invested in Pabai’s flagship fund at inception turned into $937,000 by year-end 2016, after fees.
That rate of return works out to an average annual return of around 15%, compared with 9.62% for Berkshire Hathaway (BRK-B) in the same period.
Like any good value investor, Pabrai bets on undervalued companies. He then waits patiently for the market to recognize that value.
Today, Pabrai’s top bet is Fiat Chrysler Automobiles N.V. (FCAU). As of March 30, 2017, Pabrai’s position in Fiat hit an eye-popping 34.45% of his fund’s $405 million portfolio.