INSUBCONTINENT EXCLUSIVE:
Year 2018 proved to be a litmus test for stock investors
While retail investors felt heat of severe selling in midcaps and smallcaps last year, big names including US-based investor Mohnish Pabrai
His fund Pabrai Investment Fund (PIF) 3 slipped most by 41.90 per cent last year, followed by The Pabrai Investment Fund II (down 35.30 per
cent) and The Pabrai Investment Fund IV (down 22.80 per cent)
His funds held nearly 10 per cent stake in Rain Industries as of December-end 2018
Indian securities laws do not allow any single Foreign Portfolio Investor (FPI) to own more than 10 per cent of any listed business.
At
start of 2018, these stocks were together valued at $144 million, $165 million and $151 million in PIF2, PIF3 and PIF4, respectively
decline in prices of these two positions is overwhelmingly responsible for our underperformance in 2018
of decline in 2018, has delivered over 5 times returns since they bought it in 2012
Rain Industries was bought at about $0.60 per share in 2015 and traded at over $7 in January 2018 and $1.95 at end of year
Even after 70 per cent decline for whole year, it is up over 3 times since they took position.
What stopped him selling Rain Industries
Pabrai said he knew business and its leader, Jagan Reddy, a lot better over last few years
In fact, I have never seen Jagan make even one dumb decision
He has made very large capital allocation calls over last 12+ years and they have been flawless
It is a remarkable record
SP500, Nasdaq and Dow Jones declined 4.4 per cent, 2.80 per cent and 3.50 per cent, respectively, during whole year.
PIF 2 and PIF 4 are
closed for new investors (or additions from existing investors), and only PIF3 is open to new money from existing or new investors.
