The Dhandho Investor Sells Ternium, Buys Capital Source!

Mohnish Pabrai aka the Dhandho Investor just released his 13F-HR filings seen here. Pabrai exited out of all of his Ternium ($TX) position. He had this in his portfolio since August 2007 quarterly filing. Pabrai started a new position in Capital Source ($CSE). Pabrai usually has around 15-20 different stocks in the portfolio. As of his latest filing Potash Corp ($POT) and Teck Cominco look to be his two largest holdings.

Pabrai made somewhat of a name for himself between 1999 and 2007 when he racked up returns that far outpaced the market. But as 2008 rolled in, the Pabrai Funds rolled over with the market taking a pretty big hit. However over the last year the Pabrai funds have enjoyed a nice move up along with the market but well out pacing it.

Mohnish Pabrai runs a group of partnership funds based on Warren Buffett's original Buffett Partnership Fund which existed between 1956-1969.

Author currently has NO positions in the issues mentioned

Value Investor Mohnish Pabrai - The Dhandho Investor

For those of you that are not familiar with Mohnish Pabrai, he is a devout disciple on the teachings by Warren Buffett and Ben Graham. Mohnish runs a fund identical to Warren Buffett's original Buffett Partnership which was the predecessor of Berkshire Hathaway. Pabrai wrote a book about 2 years ago titled the Dhandho Investor. The word Dhandho which is pronounced dhun-doe is a Gujarati(a state in India) word. Dhan comes from the Sanskrit root word Dhana meaning wealth. Dhana-dho, literally translated, means "endeavors to create wealth". Pabrai is a focus investor usually holding about 12-18 stocks in his portfolio. Pabrai likes to put no more than about 5% to 10% in each stock. Currently Pabrai holds 17 stocks in his portfolio with about 235 million under management. Ternium $TX, Harvest Natural $HNR, Teck Cominico CL B shares, Berkshire Hathaway $BRKB and Fairfax Financial Holdings $FFH are his 5 top holdings. The current 13F filings show that Pabrai bought a large position in Brookfield Properties $BPO while closing out his position in Sears Holdings $SHLD . For those of you that have not read the Dhandho Investor, you should, it is simple to understand and makes a lot of sense.

Posted via email from stockmanmarc's posterous

Mohnish Pabrai Files 13F-HR

Mohnish Pabrai increases holdings from 16 to 20 holdings, unloads MDC Holdings(MDC)  and Jackson Hewitt(JTX)  while adding new positions in  Cresud(CRESY), Goldman Sachs(GS), Horsehead Holdings(ZINC), Leucadia National Corp(LUK), Potash Corp(POT) and Teck Cominco(TCK). Lets hope Pabrai aka The Dhandho Investor  can get back on track after suffering through a terrible 2008. Pabrai has made a name for himself over the last few years after racking up Warren Buffett size returns from 1999 until the market went southbound. Pabrai bases his partnership on The Buffet Partnership of the 1960's. Here is the latest 13F for the Pabrai Funds. 

Be sure and check out Mohnish Pabrai 2008 Year End Letter over at Todd Sullivan's - ValuePlays 

Relevant Articles:

The Dhandho Investor Buys Into Zinc!

Stock Analysis on a small cap: Horsehead Holdings

The Dhandho Investor Buys Into ZINC!

Back in early November I  wrote a post on Horsehead Holdings Corp.(ZINC) .  Horsehead is  the largest zinc producer in the United States and the leading manufacturer of value-added zinc products including zinc oxide and zinc powder. Zinc has many uses such as a protective coating to various fabricated products, it is found in  tire and rubber products, chemicals, ceramics, plastics, paints, lubricating oils, and pharmaceuticals it is also used in brake linings for automobiles.

      Since my last post on Horsehead, I noticed that Mohnish Pabrai alias The Dhandho Investor has taken a stake in ZINC.  Pabrai has made a name for himself over the last few years returning Warren Buffett SIZE returns. Pabrai by the way is a former IT guy turned money manager. Pabrai usually has 10 to 15 stocks at a time in the portfolio. I thought it was interesting that Pabrai bought into one of the stocks I followed, usually its me following the Gurus. However I'm sure Pabrai saw the same things that I did in this company. First off the company has $80mil in cash which equates to $2.28 a share. They have virtually no debt with a debt-to-equity ratio of "0". Their also trading at nearly 50% book value, which is currently at $7.93 a share. It also looks like 125,000 plus investors over at the Motley Fool have picked up on this one as well.  The company  looks as if its staying ahead of the economic downturn by running a rather tight ship. In December Horsehead  announced that it is taking aggressive steps to reduce operating costs including idling its recycling facilities for the last week of 2008 , reducing its salaried workforce, and revising the construction strategy for its new South Carolina facility. Horsehead expects that these reductions will result in annualized savings of approximately $2 million. A few more points I would like to mention that this is a cyclical stock, and with the current economic conditions it could stay depressed for a while. Also forward looking earnings (2009) are projected at an average loss of 62 cents a share. So while the short term outlook does not look rosy valueinvestors and pabrai himself are looking for the low-risk, high-uncertainty businesses.

  "Low risk and high uncertainty is a wonderful combination. It leads to severely depressed prices for businesses - especially in the pari-mutuel system- based stock market. Dhandho entrepreneurs first focus on minimizing downside risk. Low-risk situations, by definition, have low downsides. The high uncertainty can be dealt with by conservatively handicapping the range of possible outcomes. You end with the classic Dhandho tag line: Heads, I win tails, I don't loose much!"   -Mohnish Pabrai.  

 The 52 week week high was $18.31 and the 52 week low was $2.26, which as I mentioned earlier is the cash it has on hand. Currently ZINC is trading at $4.25 with a NCAV of $4.45.

*Author is neither long nor short.  

Relevent Articles

The Graham & Dodders (Forbes)

the Dhandho Investor: Mohnish Pabrai

For those of you that are not familiar with Mohnish Pabrai, he is a devout disciple on the teachings by Warren Buffett and Ben Graham. Mohnish runs a fund identical to Warren Buffett's original Buffett Partnership which was the predecessor of Berkshire Hathaway(BRKA,BRKB). Pabrai wrote a book about a year ago titled the Dhandho Investor. The word Dhandho which is pronounced dhun-doe is a Gujarati(a state in India) word. Dhan comes from the Sanskrit root word Dhana meaning wealth. Dhan-dho, literally translated, means "endeavors to create wealth".

Pabrai is a focus investor usually holding about 12-18 stocks in his portfolio. Pabrai likes to put no more than about 10% in each stock. Currently Pabrai holds about 16 stocks in his portfolio with about 320 million under management. Fairfax Financial(FFH), Harvest Natural(HNR), and Sears Holdings(SHLD) represent his 3 top holdings. The current 13F filings show that Pabrai increased his holdings by 52% in Wellcare(WCG) while selling most of his position in Jackson Hewitt(JTX).
For those of you that have not read the Dhandho Investor, you should, it is simple to understand and makes a lot of sense.