This is about the Pabrai Wagons fund (ticker WAGNX) for the first half of 2024. The manager thinks the S&P 500 is too expensive (P/E 27.5, near 2000 bubble levels) while his fund's P/E is only 6.7, so he's cautious on the market but confident in his own picks. The top three holdings are all Turkish companies: TAV Havalimanlari (airport operator), Anadolu Efes (brewer), and Coca-Cola Icecek (Coca-Cola bottler), together making up over 30% of the fund. It also owns several US coal companies like Arch Resources and Alpha Metallurgical Resources.
One-sentence summary: The author believes the current S&P 500 is overvalued (P/E 27.5, approaching 2000 levels), while the fund portfolio has a P/E of only 6.7, making the direction correct, with a stance of [cautious/bearish on the S&P 500, optimistic on its own portfolio].
Since inception (9/29/2023–6/30/2024), WAGNX rose 24.64% and WGNIX rose 24.86%, slightly below the S&P 500's 28.77%; however, year-to-date 2024 (through 6/30), WAGNX gained 15.60% and WGNIX gained 15.68%, both outperforming the S&P 500's 15.29%. The fund's portfolio P/E is only 6.7, far below the S&P 500's 27.5 (near 2000 levels, with a long-term average of 16). The author believes buying the S&P 500 at current levels carries high risk, while the fund is positioned correctly.
The fund holds 26 stocks, with the top 10 positions representing over 65% of net assets; the top three holdings are all Turkish companies. By sector, consumer (discretionary + staples) accounts for 50.8% combined, while industrials and materials together account for 37.2%.
| Top 10 Holdings | % of Net Assets |
|---|---|
| TAV Havalimanlari Holding AS | 12.2% |
| Anadolu Efes Biracilik Ve Malt Sanayii AS | 10.5% |
| Coca-Cola Icecek AS | 10.2% |
| Arch Resources, Inc. | 7.0% |
| Alpha Metallurgical Resources, Inc. | 5.4% |
| CONSOL Energy, Inc. | 4.0% |
| AG Anadolu Grubu Holding AS | 4.0% |
| Penske Automotive Group, Inc. | 4.0% |
| Danaos Corp. | 4.0% |
| Warrior Met Coal, Inc. | 3.9% |
Sector Allocation: Consumer Discretionary 30.1%, Consumer Staples 20.7%, Industrials 20.4%, Materials 16.8%, Energy 8.0%, Information Technology 3.0%, Cash & Other 1.0%.
On December 29, 2023, the Board approved lowering the operating expense cap from 1.14% to 0.90%, effective January 1, 2024. The fund's net management fee is zero, portfolio turnover is 45%, and net assets are approximately $32.35 million.
| Ticker | Direction | Author's One-Sentence View | Key Data |
|---|---|---|---|
| TAV Havalimanlari Holding AS | Hold & Watch | Largest position, Turkish airport operator | 12.2% of net assets |
| Anadolu Efes Biracilik Ve Malt Sanayii AS | Hold & Watch | Second-largest position, Turkish brewer | 10.5% of net assets |
| Coca-Cola Icecek AS | Hold & Watch | Third-largest position, Turkish Coca-Cola bottler | 10.2% of net assets |
| Arch Resources, Inc. | Hold & Watch | Fourth-largest position, coal company | 7.0% of net assets |
| Alpha Metallurgical Resources, Inc. | Hold & Watch | Fifth-largest position, coal company | 5.4% of net assets |
| CONSOL Energy, Inc. | Hold & Watch | Sixth-largest position, coal company | 4.0% of net assets |
| AG Anadolu Grubu Holding AS | Hold & Watch | Seventh-largest position, Turkish holding company | 4.0% of net assets |
| Penske Automotive Group, Inc. | Hold & Watch | Eighth-largest position, auto dealer | 4.0% of net assets |
| Danaos Corp. | Hold & Watch | Ninth-largest position, container shipping company | 4.0% of net assets |
| Warrior Met Coal, Inc. | Hold & Watch | Tenth-largest position, coal company | 3.9% of net assets |