Mohnish Pabrai on Valuable Investment Tools. | [C:M.P Ep.22]

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In this episode, Mohnish Pabrai shared some valuable investment tools that he use to research on stock ideas.

In this episode, you’ll learn:
- What are the investment tools that Mohnish Pabrai use?
(https://www.yapss.com/post/collection-mohnish-pabrai-22-investment-tools)

#MohnishPabrai #BostonCollege

[Transcript]
MOHNISH PABRAI 00:08
And you know besides Warren and Ted Weschler and stuffs. Several other analysts and several other tools mostly available at zero, close to zero cost that are quite exciting and quite interesting for me to use and leverage.

And so first I will start with you know, some of these things are coming up on the screen. Let's start with the Value Investors Club. So how many of you in the room are familiar with Value Investors Club, you could just maybe raise your hand?

We have – Arvind I'm deeply disappointed in what you've taught them so far. How come you kept them away from the Value Investors Club? Oh, okay. Sorry. Maybe I'm not seeing the full classroom.

So anyway you know, I don't know if you guys know the history of Value Investors Club. But you know, it was set up by Joel Greenblatt and – And Joel and his partner, John Petry. Basically, they – many years back, I think this is going back to the early days of the internet.

They had a – They've done an analysis of some business that they were, you know making an investment in and I think they were on some Yahoo message board related to the public companies. And on that Yahoo Message board, they saw one particular poster put up a extremely detailed analysis of that business that they were looking at and the analysis was actually superior to even what they had come up.

And this person did not work at a hedge fund or a mutual fund. He was just an amateur investor investing word puzzle account and they were just really surprised that you know out in the transcend if you will was this you know, islands of incredible talent.

And so they thought about how can you get – how can we kept this talent? And so they came up with this idea of the Value Investors Club and what they decided is that they would invite anyone on the planet who has an interest to become a member of the club. And to become a member, you have to submit an investment idea.

And of course, they would review the idea and see it was good enough to admit you into the club. And then once you go into the club, you were required to submit I think two ideas a year. And I don't think you could submit more than four ideas. So they wanted to limit how much you could submit.

And then every week they awarded $5,000 to the person who came up with the best idea. And so you know, they basically said that you know for about a quarter million dollars plus the cost of running website.

They will get this amazing information flow and cut out all the nonsense that you get in Yahoo message board because they would – Basically, curated site that about what you posted on. And actually, if you go on Value Investors Club, you will see in general that the average write up is quite high quality. And many of the folks who are posting write-ups and such are not professional investors.

In fact, there is a person who has a handle on Value Investors Club called 'Charlie479.' So you can do a search on Charlie479 and you know, it'll pull up all of the ideas that he submitted. I don't know he's been activate today's date? But, his ideas are so good.

The other thing that Joel Greenblatt and John Petry did was that if they were truly impressed with what people came up with. Then they talked to them and they set them up in the investment business.

They basically, seeded the money to manage, took a stake in the general partner and introduce them to other people who might want to invest with them. And so they – I don't know the number, but I know I personally know several funds that was set up by people who originally came on Value Investors Club just as amateur investors.

If you will – Anytime, I look at investment idea let's say you know – In fact, like for example, last June I noticed – In fact, it was before that actually was in the first quarter of 2012 when the Berkshire's 13-F that came out for the first time they listed General Motors as a holding of theirs.

And of course, you know, I hated the car business; tight CAPEX, it's got unions, it got all these you know, consumer tastes [Inaudible]. And you have to make all these passive investment upfront and such.

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