Who Is Mohnish Pabrai: The 'Copycat Crorepati' Who Follows Warren Buffett’s Strategy

The 94-year-old legendary investor Warren Buffett is an inspiration for almost every person in the world who wishes to grow their wealth by investing, right? Over his seven decade career, he has served as a beacon for generations. And quite naturally, many investment enthusiasts have tried to emulate Buffett's investment style, hoping to replicate his success.

However, achieving such mastery is rare. One notable exception is Mumbai-born Mohnish Pabrai. The 61-year-old Indian-American businessman, investor, and philanthropist has amassed billions of dollars by adopting legendary investor Warren Buffett's investment strategies. In 2007, Pabrai made the headlines by spending $650,000 to secure a lunch with Warren Buffett, as part of an annual charity auction¹. Then, in March 2022, Pabrai was over the moon when he won accolades from none other than Buffett himself for the Indian billionaire’s philanthropic endeavor, Dakshana².

Monish Pabrai’s Net Worth

Mohnish Pabrai, who holds the position of the founder of Pabrai Investment Funds and Dhandho Funds, commands a net worth of nearly INR 140 crore as of December 2024³. Through the years, Pabrai has emerged as one of the foremost investors, primarily by emulating or 'cloning,' as he prefers to call it, the investing style of Warren Buffett and later, Buffett's close confidant Charlie Munger, who had unfortunately passed away at the age of 99 in the year 2023.

How It All Started For Mohnish Pabrai

After selling TransTech (an IT consulting firm he had started in 1991) for $20 million in 1999, Mohnish Pabrai embarked on his journey in the world of investing. With an initial investment of $1 million, he launched the Pabrai Investment Fund, focusing on undervalued stocks.

His early successes included Satyam Computers in 1995, which saw his investment appreciated by an eye-watering 140 times in five years. Pabrai had wisely sold that stock in 2000, just before the dot-com bubble burst, pocketing a handsome profit of $1.5 million. He then multiplied this capital to $10 million in less than five years. 

Some of his other big and successful investments include Micron Technology and Alibaba, but he made surprise exits from both these giants in recent years.

Copying, But Still Being Careful

Needless to say, Mohnish Pabrai has been careful and calculated in his attempts to copy Warren Buffett's style. He realised Buffett had mastered the game of compounding to double his money multiple times, so he meticulously replicated his strategy.

94-year-old Warren Buffett has often said that "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." Following the same principle as the legendary billionaire, Mumbai-born Pabrai's portfolio has largely focused on mispriced, undervalued stocks. In the Indian market, his big bets are Rain Industries, Edelweiss Financials, and Sunteck Realty⁴.

He Avoids Startups And IPOs

"The driver for me is not to get wealthy, but to win the game. It's exactly the same driver for Warren Buffett, which is to show through results that I did the best and I am the best because I played the game by the rules, fair and square, and I won", Padbrai was once quoted as saying⁵.

Moreover, the Indian billionaire also believes that if there are no better opportunities in investing, it is best to wait for opportunities to arise, rather than hurrying into something that might not give good returns.

Also, he avoids investing in startups and initial public offerings (IPOs) and has never shorted a stock⁶. He also avoids macro investing in favour of micro, where he focuses on businesses he understands. Here’s a detailed interview of his in which he explained why he never invests in IPOs⁷.

Two Books The Billionaire Recommends To Investors

Mohnish had once shared two books that he recommends to investors⁸. The first is Thomas William Phelps' 100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities, and the second is Christopher Mayer's 100 Baggers: Stocks That Return 100-to-1 and How to Find Them, which details companies that returned $100 for every dollar invested.

Sharing His Key Investment Principles

As per an ET report, Mohnish Pabrai had once shared some valuable principles for investing, which he himself focuses on⁹:

1. Pabrai has often remarked that investors should buy a stock if they are willing to buy the whole company. Buy a valued company and stay invested.
2. The reason why Pabrai's portfolio has only a few stocks is that he picks them carefully, and these bets are likely to bring positive returns.
3. Knowing the fair value of a stock is crucial to making investment decisions. According to Pabrai, assets worth USD 1 should be invested for less than USD 1.
4. Don't miss the moat, which is a term usually used to refer to a financial advantage a company has over its competitors, which enables them to protect their market share and profitability.

Frequently Asked Questions:

1. Who is Mohnish Pabrai?
   Mohnish Pabrai is an Indian-American investor and philanthropist known for adopting Warren Buffett’s value investing strategy to build his fortune.
2. What is Mohnish Pabrai’s net worth?
   As of December 2024, his net worth is estimated at INR 140 crore, largely earned through Pabrai Investment Funds.
3. Why does Mohnish Pabrai avoid IPOs and startups?
   He believes IPOs and startups are risky and prefers waiting for undervalued businesses with long-term potential.
4. What books does Pabrai recommend for investors?
   He suggests 100 to 1 in the Stock Market by T.W. Phelps and 100 Baggers by Christopher Mayer.

References:

1. CNBC, accessed from: https://www.cnbc.com/2018/05/25/3-things-two-men-learned-from-their-650000-lunch-with-warren-buffett.html
2. Economic Times, accessed from: https://economictimes.indiatimes.com/markets/stocks/news/warren-buffett-praises-mohnish-pabrai-but-its-not-about-stocks/articleshow/90415849.cms?from=mdr
3. Trendlyne, accessed from: https://trendlyne.com/portfolio/superstar-shareholders/69664/latest/mohnish-pabrai-portfolio/
4. Trendlyne, accessed from: https://trendlyne.com/portfolio/superstar-shareholders/69664/latest/mohnish-pabrai-portfolio/
5. Quartr, accessed from: https://quartr.com/insights/investment-strategy/mohnish-pabrai-mastering-buffett-s-playbook-to-billion-dollar-success
6. Economic Times, accessed from: https://economictimes.indiatimes.com/news/india/1-million-to-13-million-in-5-yrs-indian-warren-buffet-mohnish-pabrai-shares-his-success-journey/articleshow/110458856.cms?from=mdr
7. Economic Times, accessed from: https://economictimes.indiatimes.com/markets/expert-view/follow-this-mantra-never-ever-invest-in-any-ipo-mohnish-pabrai/articleshow/61064733.cms?from=mdr
8. CNBC, accessed from: https://www.cnbc.com/2022/06/09/buffett-disciple-mohnish-pabrai-names-his-favorite-investing-books-.html
9. Economic Times, accessed from: https://economictimes.indiatimes.com/news/india/1-million-to-13-million-in-5-yrs-indian-warren-buffet-mohnish-pabrai-shares-his-success-journey/articleshow/110458856.cms?from=mdr

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