Wednesday July 4, 02:49 AM
Pabrai's Buffett-style power lunch
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By fe Bureau
Mumbai-born NRI hedge fund owner Mohnish Pabrai knows all too well that there is no such thing as a free lunch. Pabrai, who runs an eponymous fund that manages assets of $600 million, bid a startling $650,100 (2.6 crore) for the honour to break bread with legendry investor Warren Buffett-hitting headlines around the world in the process. The proceeds will go to a charity of Buffett's choice.
"I had bid four times previously. Almost all that I have learned about investing has been from 'The Sage of Omaha', and my family and I are looking forward to the lunch, which will take place at a time of mutual convince some time next month," the Irvine-based Pabrai told FE on the phone.
Pabrai's hedge fund has consistently outperformed the US stock markets and in the last two years, returned a rate of 29%, which even the best hedge funds would find hard to match. Pabrai has also authored a book called The Dhandho Investor. He finds a striking similarity between the way Buffett has invested and the Gujarati culture of value investing-holding out for the long term.
"The Gujarati community has a strategy of concentrated investments in a few stocks. The key is to find stocks with a low downside and when chosen carefully, concentrated investing nearly always gives the best returns," Pabrai said.
Like idol Buffett, Pabrai believes that children shouldn't be left too big an inheritance and is determined to give away most of his wealth. This is the other reason why he is so excited about the upcoming lunch. Said Pabrai: "What Buffett has done by giving away his wealth in his own lifetime is to set an example for all of us. For my part, I do not wish to leave an inheritance and have set up Dakshana Foundation, which will be giving away my personal wealth within my lifetime. In the US, giving is today a staggering $300-billion industry. However, frankly, India disappoints in this regard."
So, as the guru and the shishya meet for a $650,000 power lunch, the question everyone is asking is how big a tip will they leave?
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