How far can $650,100 go?
Well, a three hour power lunch with the Oracle of Omaha, Warren Buffett, for starters…
After four earlier unsuccessful attempts, Mohnish Pabrai, a California based Indian investor and hedge fund manager and his bidding partner, Guy Spier of Aquamarine Capital Management LLC finally managed to come up with the winning bid of $650,100 (Rs. 2.6 crore) in the annual charity auction on eBay.
The auction benefits the Glide Foundation, which provides social services to the poor and homeless in San Francisco. Pabrai, his wife and two daughters will accompany Spier and his wife to the Smith & Wollensky steakhouse in New York City where they will break bread with Buffett. Pabrai will pay two-thirds of the winning bid and Spier, the other third.
So who is Mohnish Pabrai?
According to him, he is just a humble disciple of Warren Buffett. A serial entrepreneur, he exited his ventures around the time of the dot com meltdown to begin a full time occupation in value investing. He also applied to Buffett for a job, even offering to work for free, which was turned down.
He launched his fund, the Pabrai Investment Fund in 1999 with $ 1 million, which has now grown to managing almost $ 600 million. Though he follows the master’s investing principles and calls himself a “shameless clone” of Buffett, he has outperformed his guru by a wide margin. Since inception, his fund has managed annualized returns of almost 30% beating Berkshire Hathway’s returns of around 20% over the same period.
He has authored a book The Dhandho Investor: The Low – Risk Value Method to High Returns in which he examines the low-risk, high-return approach to business of the Patel community from India. “Dhandho” is a Gujarati word which broadly means business or creation of wealth.
According to Pabrai, the secret to investment success lies in not confusing activity with productivity. So just like Buffett, who sometimes goes years without actually buying any stocks, Pabrai is also not too keen on an investment unless it makes enough compelling sense to buy it.