Mohnish Pabrai on Patience

Page 8 PIF3's Largest Holdings Shares Held Cost Market Value Vintage Approx. (millions) (millions) Return Micron Tech. 389,000 $16 $31.6 2018 2x Rain Industries 14,737,427 $10 $29.4 2015 3x Reysas Logistics 23,395,000 $4.2 $27.1 2019 6.5x Sunteck Realty 3,701,506 $13.5 $19.4 2017 1.4x Seritage Gr. Prop. 1,211,000 $11.0 $19 2020 1.7x Total $126.5 (~3/4th of PIF3 assets) The grapes of 2016 must have been sour. As an investor in Pabrai Funds, you can take some comfort from the likely zero overlap between Pabrai Funds and your other investments. You probably don’t own any of these household names. The large gains in Reysas Logistics may have piqued your curiosity. Let’s delve further. Reysas Logistics – The Little Engine that Could Reysas Logistics is based in Istanbul, Turkey. Over the years, Fahad and I have made several wonderful trips to Istanbul and met with 50+ listed businesses in Turkey. On our last trip in July 2019, we visited the headquarters of Reysas and met with the outstanding father-son duo that run the place. After the meeting and drilldown, we sold our other two investments in Turkey and put every dollar we could into Reysas Logistics. “All day you wait for the pitch you like; then when the fielders are asleep you step up and hit it.” - Warren Buffett Durmus Doven founded Reysas in 1989. The family owned a Toyota dealership in Ankara in the 1980s.

Whether this “correction” takes place over a day, a year or ten years is unpredictable. In the meanwhile, I love crawling through the crevices of inefficiency looking for that rare fat pitch. Alignment of Interests Since all three funds were at historic highs on Nov. 30, management fees were payable. PIF3 was also paid a management fee of $196,403.4

were a year ago, but both are presently valued at a 25% or higher discount to my conservative estimate of their respective intrinsic values. I believe the market as a whole is overvalued. It is very hard to find good investment ideas in these euphoric markets, but I’m in no particular hurry. All markets do eventually get to trading around a fair valuation. Whether this “correction” takes place over a day, a year or ten years is unpredictable. In the meanwhile, I love to crawl through the crevices of inefficiency that exist in all markets to find that rare fat pitch. Alignment of Interests On Sept. 30, since PIF2 and PIF3 were at historic highs, management fees were payable. PIF3 paid a management fee of $98,842.50 when it hit a historic high on 8/31/03 and $17,159.87 when it again hit a new high on 9/30/03. Since PIF3 is an offshore fund, I cannot invest in it and am required to take the fee out of the fund. A management fee of $171,708.34 was paid (wholly owned by me) by PIF2 on 10/1/03. As I have always done, this fee was reinvested in PIF2 on 10/1/03. Dalal Street has 228,935 units of PIF2. This stake was worth about $5 Million as of 10/1/03. Thus I have a deep vested interest in the future performance of The Pabrai Funds. When you win, I win. Our interests are completely aligned. I am very bullish on the long-term future of The Pabrai Funds – as demonstrated by my being the single largest investor in the funds.