During this interview with Weekly On Stocks, Mohnish Pabrai discusses when ‘never-sell’ is the best investing strategy. Here’s an excerpt from the interview:
Pabrai: One of the biggest mistakes I have made many, many times in my investing career is I have repeatedly sold very good businesses because they appeared to be overvalued.
And what I have learned after taking a lot of arrows in my back and making a lot of mistakes is when you find yourself in the happy position of owning a fraction of a great business, pretty much never sell it.
Unless it is just extreme egregious crazy price.
So if we look at a business like Ferrari today, I think the price of the stock is more than 300.
In 2012 when I originally invested in a company that owned Ferrari, the effective price was less than fifteen dollars.
So in the last 11 years, the price of Ferrari has gone up more than 20 times. One of my biggest regrets is the sale of Ferrari and the sale of Moutai for example.
Because these are iconic, one-of-a-kind, very unusual companies. I made a lot of money on Ferrari, I also made a lot of money on Moutai, but the best thing one can do is when one finds oneself in the happy position of owning a truly terrific business, is to never sell it.
You can listen to the entire discussion here:
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