Mohnish Pabrai: A Tale of Missed Chances in Investing

During his recent interview with The Investor’s Podcast, Mohnish Pabrai discusses his passion for bridge and shares a story about an investor who shorted Berkshire Hathaway, missing out on significant gains. The investor later regretted not investing in high-yield U.S. treasuries in the early ’80s. Pabrai reflects on missed opportunities and the importance of recognizing and capitalizing on them for long-term gains.

Here’s an excerpt from the interview:

Pabrai: Yeah, actually, that’s a great question. I do very much enjoy the game. But that would be a very tempting offer. I’d have to think about I mean, in the sense that I mean, basically, It’s all or none, right? You’re suggesting it’s all or none, right? I would say that I might, I probably take it and go all in on bridge.

I remember there was a, it’s really funny. There was a, there’s a guy who invested in my fund a long time back, maybe more than 20 years ago. And he said that one day he had opened Barron’s or something. And there was some article on Berkshire. This is going back, into the early two thousands. And he saw that the stock is like 70, 000 and he said, no company, this was his thinking is a smart guy.

Okay. He says, no company on the planet is worth 70,000 per share. Okay. He didn’t know anything about Berkshire, nothing about Warren Buffett, and he shorted the stock. Okay. Much to his detriment. Okay, he met me a few years after getting burnt on that chart and then he actually said to me, he said, in the early eighties, he said, I had noticed that the U.S. treasuries were playing 18 percent.

Pretty close to what you said. Okay, you could have bought 30 year U.S. treasuries. In 1980 or 1981, and for 30 years, the US government would pay you 18% a year on that bet. Okay? And he said to me, Mohnish, not only the short Berkshire, I didn’t take that bet. Okay? That 18% be, no. Most people didn’t take that bet. Okay?

And then he said to me, I just want God to gimme one more chance. He said to me, give me one more chance of 18 percent U.S. treasuries and I will put everything in. I promise God I’ll put everything in and I’ll never invest in anything again. So exactly what you were saying is what this guy was saying to me, which would have been smart for him to do.

And that would have been one hell of an investment from 1980 to 2010 to get 18 percent compounded It would be, it would have been unbelievable with no volatility.

You can watch the entire interview here: