Mohnish Pabrai: Investment Wisdom Without a Degree: Learning from Buffett for Free

Johnny HopkinsMohnish Pabrai

During this Q&A session with Harvard Business School, Mohnish Pabrai emphasizes that formal education isn’t necessary for learning about successful investing. He sees value investing as a niche, allowing him to discover market inefficiencies and mispriced businesses. He compares this to a scenario where two economists ignore a visible $100 bill, highlighting the opportunities that others might overlook. Pabrai’s approach is to identify and seize such opportunities. Here’s an excerpt from the session:

Pabrai: You actually don’t need to go to any school, you can just you know has all the annual meetings for the last more than 25 years.

Six hours each, so it’s about 150 hours of Warren and Charlie. So I went through every single one of those in the shower twice, took about like six, seven months while I’m showering and shaving and brushing every morning.

And I’m going through it right now for the third time. Each time I learn more and every morning I get educated you know. Right now I’m in the year 2001, the afternoon session, it’s an orgasmic experience and the thing is it’s all there, it’s free.

Then you have all the Berkshire letters and you have all the transcripts I mean there’s you really don’t need to spend even five dollars you know, it’s all there.

Don’t need to pay tuition to nobody but no one’s interested you know. It’s all there but no one’s interested. So I just said okay the Buffett partner structure, no one’s interested, I’ll clone it.

Buffett’s approach to investing, no one’s interested, I’ll do that too. And even today you know some people follow value investing, it’s a still a very small sliver.

So we continue to find inefficiencies in the markets. We continue to find widely mispriced great businesses and you know there’s a $100 bills on the ground.

There’s two University of Chicago economists walking by, they see the $100 bill and the one guy says, oh look there’s a $100 bill. The other guy says you know, they’re both efficient market theorists, he said it’s not there. If it was there it would have been gone a long time ago, it’s not there, keep walking.

That’s the way the world works. The $100 bill that they can see is not there.

And so the Indian guy is going to go in and pick up the stupid $100 bill that no one else wants to see and it’s okay. That’s what we do, we just go pick up the $100 bills lying around.

You can watch the entire discussion here:

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