In his recent interview on the Richer, Wiser, Happier Podcast, Mohnish Pabrai discussed two of the most important lessons in investing. Here’s an excerpt from the interview:
Pabrai: So I think that there are two things that are important in investing. One is that we have to be very cognizant about the fact that this is not brain surgery, where 3% error rate is bad news. You’re going to have a high error rate.
The second is that when you are right, you can be really right. You could have a 10 bagger or 20 bagger or something, which would cover a lot of sins.
And the other thing is to have the humility, to realize when you have been wrong. Seritage is a good example where I thought that I’d looked at it in many ways to Sunday and it was going to work.
Then I finally came to the conclusion that no, there was an error, there was an error in my analysis. And that it was going to be some pretty heavy lifting to make it work the way I thought it should.
You can watch the entire discussion here:
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