Mohnish Pabrai, founder of Dalal Street LLC, is one of the most prominent disciples of Warren Buffett and Charlie Munger’s value investing principles. Known for his concentrated, high-conviction portfolio and long holding periods, Pabrai prefers to invest in a handful of companies he understands deeply rather than spreading capital across dozens of positions. His style blends patience with opportunism, seeking to buy durable businesses at significant discounts to intrinsic value.
In Q2 2025, Dalal Street reported a 13F portfolio value of $271.6 million spread across only five stocks, with an average holding period of four quarters. This high concentration reflects Pabrai’s belief that meaningful outperformance comes from investing heavily when the odds are favorable rather than diversifying for its own sake.
The portfolio’s one-year performance was down 56.21%, largely a result of cyclical commodity exposure, but the moves in the latest quarter show a reaffirmation of his core thesis, maintaining heavy allocations to energy and steel, while selectively adding to these areas and introducing a new position in automotive retail.
The most notable activity in Q2 was a sizable increase in Valaris, additional buying in Alpha Metallurgical Resources, and the initiation of a stake in AutoNation. This is consistent with Pabrai’s focus on what he sees as undervalued, cash-generative “old economy” industries rather than chasing high-growth technology themes.
In the sections ahead, we will explore Mohnish Pabrai’s background, his investment philosophy, and the key Q2 2025 portfolio moves, including detailed commentary on the largest additions, new buys, and his highly concentrated top holdings.
Who Is Mohnish Pabrai
Mohnish Pabrai founded Dalal Street LLC in 1999 after selling his IT services company, TransTech, for a substantial gain. Since then, he has become one of the most widely recognized value investors, often referred to as a “shameless cloner” for his willingness to study and replicate the best ideas of legendary investors like Buffett and Munger.
Pabrai’s approach is grounded in buying a small number of high-quality businesses at bargain prices, holding them for years, and letting compounding do the heavy lifting. He openly credits the Buffett–Munger framework for shaping his thinking on patience, temperament, and the avoidance of unnecessary risk.
Throughout his career, Pabrai has avoided the temptation to chase popular market trends, preferring instead to focus on businesses with predictable cash flows, competent management, and a margin of safety in valuation.
Over the years, he has built a reputation not only as a skilled investor but also as a teacher and author, sharing his methods through books like The Dhandho Investor and Mosaic. His disciplined, concentrated approach stands out in an industry dominated by index hugging and short-termism.
Mohnish Pabrai’s Investment Philosophy
At the core of Pabrai’s philosophy is the belief that few bets, big bets, and infrequent bets offer the best chance for market outperformance. He focuses on asymmetric opportunities where the downside is limited but the upside can be substantial.
His portfolios often hold fewer than ten positions, and in many cases just five or six. This concentration demands deep research and conviction but also allows each successful investment to have a meaningful impact on returns.
Pabrai is comfortable investing in cyclical industries like energy and steel when valuations are depressed, provided the companies have strong balance sheets and the ability to generate cash through the cycle. He has also shown a willingness to hold positions for years, riding out volatility in pursuit of long-term gains.
The Q2 2025 13F filing reflects this discipline – no major sector rotations, no large-scale exits, just incremental additions to core holdings and a single new position in a business he likely views as a dominant, cash-generating market leader.
Q2 2025 Changes in Detail: Mohnish Pabrai’s Equity Portfolio
1. Adds: Reinforcing Core Old Economy Positions
The largest addition in Q2 was to Valaris (VAL), with share count increasing by 31.96%, an investment of $17.16 million. This lifted Valaris to 29.21% of the portfolio, reflecting Pabrai’s bullishness on the offshore drilling cycle and the company’s leverage to rising day rates.
Alpha Metallurgical Resources (AMR) also saw an 11.02% increase in shares, with $5.34 million added. Although its portfolio weight fell slightly due to price movements, this move signals ongoing conviction in metallurgical coal as a critical input for steelmaking.
Warrior Met Coal (HCC), already the largest holding, saw a negligible increase (+0.01%), but its massive 30.37% portfolio weight underscores its central role in Pabrai’s strategy.
2. New Buys: Entering Automotive Retail
Pabrai initiated a new position in AutoNation (AN), buying $11.01 million worth of shares at an average price of $180.54. This stake immediately became 4.46% of the portfolio. The move brings diversification into U.S. auto retail, an industry benefiting from parts and service revenue streams alongside vehicle sales.
3. Sold Outs: None
There were no complete exits in Q2 2025, consistent with Pabrai’s tendency to hold positions for the long term unless the original thesis is broken or valuations become excessive.
4. Cuts: Minimal Reductions
No meaningful trims occurred this quarter beyond minor portfolio weight adjustments from market movements. Pabrai’s Q2 activity was more about building than reducing exposure.
Top Holdings: Q2 2025 Equity Portfolio
As of Q2 2025, Dalal Street’s five holdings made up 100% of the portfolio:
- Warrior Met Coal (HCC) — $82.48M, 30.37%
- Valaris (VAL) — $79.33M, 29.21%
- Alpha Metallurgical Resources (AMR) — $51.78M, 19.06%
- Noble Corporation (NE) — $45.90M, 16.90%
- AutoNation (AN) — $12.12M, 4.46%
The heavy tilt toward energy and steel illustrates Pabrai’s conviction in commodity-linked cash flows, while AutoNation adds a new dimension to the portfolio without diluting its concentrated nature.
Key Takeaways: Mohnish Pabrai’s Q2 2025 Equity Portfolio
- $271.6 million portfolio fully concentrated in just five holdings.
- Strong old economy bias with major positions in energy and steel, no direct exposure to technology or AI.
- Largest addition to Valaris reflects conviction in offshore drilling recovery.
- New stake in AutoNation marks selective diversification into auto retail.
- No full exits and minimal trimming, underscoring a long-term, conviction-driven strategy.
