Mohnish Pabrai is a great guy, and I have immense respect for him. But, I don't make my investment decisions based upon his - or anyone else's - actions. I would like to hold myself responsible for my deeds. Sure, I will hear those I admire, and Mohnish is one of them.
I don't know why he bought Repco Home Finance during April-September 2018. There must have been good reasons to buy.
As per this report, his fund bought 3,719,265 shares during April-June 2018 quarter.
During that period, the lowest quoted price was Rs.540.90, and the highest price was Rs.642.40.
The fund made more purchases of the stock during the next quarter ended September 2018.
During July-September 2018, the lowest price was Rs.425 which was only at the end of September 2018, and the highest price was Rs.624.95.
As of September 2018, the total number of shares held by the fund was 3,909,699.
We don't know yet whether there were additional buys during October and November 2018. However, what we know now is that the fund sold some shares on 29 November 2018 at a price way below cost.
BSE:
NSE:
A total of 948,535 shares have been sold. And again, I don't know why he sold the stock. There must have been good reasons to sell.
It is fine to sell a stock only when our initial analysis turns out to be incorrect; or when the company's fundamental situation deteriorates subsequently for whatever reasons; or when we find a better buy.
I don't know what the reasons are for the fund to sell the stock within such a short period of time. The stock has not even made profits yet for the fund. There must be something we don't know. Is there a much better opportunity for the fund to not only recoup the losses on Repco, but also likely make higher profits? Hmm...
In investing, these things happen, and we have to move on.
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