Hedge Fund Manager Mohnish Pabrai’s Stock Picks

Mohnish Pabrai is a value investor who’s following in the footsteps of great value investors like Warren Buffett and Joel Greenblatt. He even set up the fee structure of his hedge fund the same way Warren Buffett did more than 50 years ago. He doesn’t charge any management fees and takes 25% of returns that are greater than a 6% threshold.

MOHNISH PABRAI

Mohnish Pabrai was very popular prior to 2008. His funds lost around 60% in 2008, sending a clear signal of the risks of his investment style. He had a complete reversal in performance in 2009, returning around 120%. He says he’s using a checklist now in order to avoid past mistakes. He strongly recommends Atul Gawande’s Checklist Manifesto. Triple digit returns helped him get more funds flowing in. Currently Pabrai has more than $500 Million in assets under management (AUM). You can learn about Mohnish Pabrai’s investment philosophy by reading his two books: Mosaic: Perspectives on Investing, and The Dhandho Investor: The Low – Risk Value Method to High Returns.

His new methodology seems to be working. In 2010, Pabrai managed to beat most equity hedge funds, returning more than 30%. Mohnish Pabrai added two new stocks into his portfolio in the third quarter of 2010: Posco (PKX) and Teck Resources Limited (TCK). PKX performed terribly since then, losing 6% despite the double digit gains in the stock market. Teck Resources returned 43%, compensating for PKX’s poor performance.

In the fourth quarter, Pabrai added Brookfield Infrastructure Partners (BIP) to his portfolio. The stock returned 8.1% so far this year, vs. SPY’s 5.2%. Pabrai also quadrupled his Harvest National Resources (HNR) position. The stock returned 4.4% since the end of December. Another bullish bet was Air Transport Services Group (ATSG). This stock was a poor performer until today. Today, the shares jumped 10%. Pabrai seems to have started dumping Posco (PKX) during the fourth quarter. It was a good decision; the stock is unchanged so far this year, underperforming the market.

Here are the 14 biggest positions in Pabrai’s $300+ Million 13F portfolio:

Company Ticker Return Value (Millions)
Potash Corp. POT 19.6% 52
Brookfield Properties BPO -0.2% 41
Brookfield Infrastructure BIP 8.1% 37
Cresud S A C I F Y A CRESY -2.1% 26
Posco PKX 0.9% 23
CapitalSource Inc. CSE 13.0% 20
International Coal Group ICO 19.1% 19
Goldman Sachs Group Inc. GS -1.7% 19
Horsehead Hldg Corp. ZINC 7.2% 18
Air Transport Services Group ATSG -7.8% 17
Terex Corp TEX 16.2% 16
Pinnacle Airlines Corp. PNCL -12.5% 16
Wells Fargo & Co. WFC 6.7% 12
Harvest Nat Res Inc. HNR 4.4% 11

These 14 stocks returned 6.3% since the end of December, beating the SPY by 1.1 percentage points. Pabrai’s best performing stocks were International Coal Group (ICO), Potash (POT), Terex (TEX), and CapitalSource Inc (CSE). Potash is owned by several other hedge fund managers, including Daniel Loeb. Seth Klarman has a huge CSE investment which netted him nearly $200 Million since the stock market’s bottom in 2009.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!