Mohnish Pabrai on his LARGEST Investment Micron | Micron Stock MU

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Pabrai를 인용한 영상으로, 마이크론(MU)이 메모리 3강 체제로 산업 구조가 바뀌어 과거와 달리 우량해졌다고 주장. 현재 시총 약 650억달러는 대체원가(약 1,000억달러)의 2/3 수준이라 저평가로 보며, 클라우드·AI 등 메모리 수요 증가를 근거로 함. 영상 제작자는 자본수익률이 낮아 복리 기업이 아니라고 평가하며 관심목록에 넣고 가격 추이를 지켜본다는 입장.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. hey guys welcome back to the channel in this video we'll be looking at some clips from one of monash proprietor's recent interviews where he talks about his largest investment micron and i'll be sharing if it's a business i'm interested in given that the stocks drop by around 50 in the current market crash so let's get into it micron is a company that's been on my radar for a while now because it's a stock that's owned by a bunch of super investors i follow including lee liu guy spear seth clarman bill rawain at sequoia and of course monash pibre who has micron at 100 of his us portfolio now this is a little misleading because we know monish owns businesses in other countries like india turkey and possibly south africa with process so micron isn't the only stock that money owns in his fund this is the only one based in the us that he is required to report by the sec in a recent interview with wall street lab monish much to our benefit went against his usual principle of not talking about companies he currently owns and he shared his basic thesis for micron and made a few interesting points that persuaded me to have another look at the business so it's usually we have no information edge we have an analytics edge and uh and and and that can i mean like for example the largest position i have right now i don't talk much about my current portfolio the largest position we have is micron technology it's in the memory business and for the longest time the memory business for decades was a terrible business boom and bust too many players someone innovates cuts their cost in half now all your inventory is the price of your inventory is above the selling price and you're losing money while they're they're making money hands over fist till you catch up and maybe you can catch up or maybe you don't and it was all of that going on moore's law and you know prices declining and we got left with i think three rational players and the game changed now everyone saw that there were three players but they had so much history and pain from the decades in the memory business that they refused to believe that anything was going to be different and my thesis about three four years ago was it's completely different so the thing is that if you look at a amazon data center and if it costs them you know 200 million or 100 million to put that up about 30 of that is going to the memory guys so it's a tax on all the streaming all the e-commerce all the shopping on everything 30 tax i'm sitting collecting the tax and uh yeah so i think i think the thing is that now you know it's it's in a industry with rapid change so we'll see the thesis is still playing out we will see how it works but i like the you know upside down side scenario there's a fair bit on pack there so i'll go through everything he said point by point so he starts off by saying that the memory business used to be a terrible business because it was overrun with competitors and they were all undercutting each other on price but over the years the smaller memory companies died out and the market became concentrated in three large players those three players are samsung sk hynix and micron one of monash's key insights about micron was how we've used our business model as attacks on computing he mentioned stuff like e-commerce shopping and streaming but i'd go even further and say it's attacks on computing in general you could also say it's a taxon ai cloud computing data centers machine learning autonomous driving car infotainment gaming and much much more memory is a crucial part of computing so as long as we have demand for more and more computing power there will always be a big demand for memory and memory is becoming more and more important for computing with such a massive amount of data being moved and stored every day as i usually do in looking at a company i first analyze micron's return on incremental capital and a reinvestment rate to see if it's a high quality business so first things first micron is very capital intensive and it requires a huge amount of capital to operate which is pretty normal in the semiconductor industry so that's no surprise however i was a little surprised to see that micron is a pretty low return business with a very high reinvestment rate this reminded me of buffett's analogy about gruesome businesses like airlines that require a huge amount of incremental capital and they make little to no money but i decided to look deeper at micron anyway to see if i could see what monish and lilu saw in the business even if it's not a compounder if you've watched my previous stock analysis videos you might be confused while i'm even looking at micron because i've always said that i never look at low return businesses that fail my initial checklist like every stock analysis i'm going to begin by putting meta through my initial checklist to see if it's a high quality compounder if a business fails this checklist i don't bother looking any further i do believe the best investments are compounders but long runways but at good prices but they're not the only type of gray investment in nick sleeps letters he says they have two business models that work well and they understand the first is of course scale economy shared which i've covered before in previous videos and the other is something called deep discounter replacement cost with latent pricing power i feel like if i try to explain this with definitions it'll seem way more complicated than it is so i'll try to explain it using micron as an example in microns investor presentation they list a replacement cost as 100 billion dollars so what that means is if you wanted to build an exact clone or replica of micron's business with all of its buildings machines and patents it would cost you around 100 billion dollars now if we look at the market cap for micron their market cap is only 65 billion meaning the business is selling for around two thirds of its replacement cost so right away micron seems like it's very undervalued and also has very high barriers to entry because a hundred billion dollars is a lot of money to start a business i'm not an expert on this business model so i'm not sure how discounted a business needs to be from its replacement cost to be considered good when nick spoke about the businesses he bought using this model he said they bought a thai cement company for one quarter of replacement costs and with another business called isca he bought it for a small premium to replacement costs so it's not clear to me how discounted it needs to be to be considered massively undervalued but the fact that micron selling for two-thirds of replacement costs was enough to get my attention and to make me look deeper at the company to see if there's an opportunity and given their products are a necessity for computing i think the business could have some pretty smooth sailing for the next decade or two it's a bit hard to predict because it's an industry with rapid change but i try to focus on the things that won't change something that won't change is that in order to have the online ecosystem that we have now which will only increase in the future we need a lot of memory and micron will probably collect 20 to 25 of that business so i think micron has a long runway and a very durable business remember at the start of the video how i mentioned that monish wasn't the only super investor that owned micron but also lilu and a few others well as it turns out monish was actually the one to first bring the idea to lilu back when they used to meet for lunch every month under orders from none other than charlie munger and micron ended up being a business that monash and lilu collaborated on together but one of the things charlie told me many years ago he said in the investing business it's really important to have somebody to talk to uh just you know you're on the echo chamber and so on so i said oh you mean like you have warned he said it wasn't wasn't always war but i had somebody and he said it's really important that you have somebody to talk to and the person shouldn't be shouldn't be someone who reports to you it should be kind of like a peer type relationship and he told he told lilu and me that he wanted us to get together for lunch once a month he basically pretty much instructed us that the two of you i want the two of you to meet once a month for lunch and uh and i told i told charlie and leeloo if lilu wants to waste you know an afternoon or you know hour or a month with me i'm more than happy to do that you know life is great what's wrong what's not to like about that but anyway those lunches were really good and uh lilu and i became great friends and actually there's uh there's one uh there's one business that we actually then collaborated on uh which was micro and uh and uh so that actually went from me to him you know i mean the other ones were coming from him and uh and so we had a we had a good uh good interaction and exchange on that and then he uh he took a position and i think he hold that for a while it just goes to show how much trust and admiration monish and lilu have for each other because like monish micron is also lilu's largest position in his portfolio i call this section the four horsemen because i find it really interesting that monish lee liu charlie and also guy spear all agree about micron and other than charlie they all made large investments in the business and this was one of the reasons why charlie told me to talk to lilu it was one of the reasons why and in fact you know he said to me recently he said uh i remember one time he told me he said so you bought mao tai i said yeah he said good okay and then recently he said to me you and uh lee liu collaborated on micron i said yeah he said the idea came from you i said yeah he said um it will do very well okay i said it's great to have god give that kind of endorsement because i didn't get that in the insurance business i talked in a previous video about social proof and how it affects your thinking and it's possible i could be falling for it myself because a massive part of me is thinking if monish and lee lou and charlie and guy spear all like the business the more the odds of them all being wrong it's definitely possible but i'm leaning towards being unlikely that four super investors with similar styles and amazing records are all wrong about micron we should never buy a stock just because someone else bought it but something we can do is we can look at what great investors are buying to get ideas and if a few quality investors with similar styles all by the same business it's a sign that we should probably look at it and do our own research but only if we understand the business i'll have to do a lot more research but for now micron is definitely something on my watch list and i'll be keeping a close eye on it going forward i only started really digging deep on micron a few weeks ago and so far i already like what i'm seeing in terms of pure raw value but it's not the quality of business i usually look for and it's not a compounder so in order to buy the stock i'll have to be pretty confident that i can accurately value the business i'll be looking for a big margin of safety in case i'm wrong another factor to whether or not i take a position in micron is if i can invest in a new compounder or one of my existing holdings at a good price i might like micron but if i can choose between a compounder and a good business that's cheap i'll choose the compounder every day of the week but the discounter replacement cost really got my attention so i'll be watching the price over the next few weeks to see how discounted it can get if you want me to do a full stock analysis on the channel for micron valuations and stuff let me know in the comments below so that's monash's take on micron and the origin story of how lilu learned about the business if you enjoyed the video please hit the like button as it really helps the channel grow and if you want to see more videos like this one be sure to hit that subscribe button if you've watched the video all the way to the end thank you so much for watching and as always this video is not financial advice and i'm not a financial advisor so please always do your own research before making any investment decisions so that's it for this video thank you so much for watching and i'll see you guys in the next one you