My Notes from Mohnish Prabai and Ramesh Damani session:
This is about a month old from early May 2020
- Bad situation, likely to improve only in 16-18 months.
- Stock market disconnected, 1929 recession market was down -85 per in the next 2 years
- Buffet etc not being buying, feel he need cash for his businesses
- Example of focus: Mohnish friend a fund manager used to manage $1b had only 3 stocks - Amazon, Berkshire and Costco and after a few yrs in 2015 he returned all money to his investors saying he doesn't want to charge fees as he intends to keep the portfolio same forever, they can just buy these shares themselves. Went to China for cycling etc
- Mohnish gave an example of Microsoft, he pitched his investment fund in 2000 to MS employees saying you are all in MS your stock and salaries, etc and till then they had only seen MS go up, but them for next 15 yes, MS was flat or down. So great company but valuation is key.
- For people with other full-time jobs, they recommend index investing
- Gold is not a productive asset so not investment
- China-US conflict a range of possibilities, China understand they need to build trust etc, a big risk
- The current Fed gov Powell did a great job buying even corporate bonds the first time in history.
- Why there was no inflation in last financial crisis when Fed printed all the money: good explanation in a book called ' The other half macroeconomics' - Recommended by Li Lu, Charlie Munger one time money manager, tinnaman activist, got 3 Columbia degrees - BS, MBA, and law in 4 yrs
- Fund facts about Buffet: eat like 5 yr old, no veggies etc
- Poor Charlie almanac page 442-494 on human psychology
- India has dropped the ball a few years back on MFG shift from China and Vietnam did a great job
- India mnc investment not confident as rules keeps changing. Don't read too much into all the global investment in JIO as these are passive investment in a great company, not really country.
- Mohnish actually said he feels he made bad decision investing in India stocks, advise everyone to invest in US etc, resident Indians can invest 250k$ per year outside india
- Communication infra with JIO etc is a great thing for Indian economy but other things like power, roads, etc holding back
- China has done phenomenally well and is inevitably the next superpower. US conflict due to that. China also took advantage of US for many years. ---Currently, 90% of US medicines, etc are made in China. When this is over, US will take steps to change that, other countries as well.
- There is a huge disruption to supply chains, in the automobile industry, they are so fine-tuned that a tire comes 20 min before it's to be assembled. Now all mess
- Bill gates used to say he always wanted to make sure he can pay everyone's salary even if MS doesn't make any revenue for 2 years.
- Now most companies can't survive even a few weeks
Recommended video: Oprah and Michael Osterholm in 2006 relevant to pandemic playout
