Category Archive

In his book The Dhandho Investor, Mohnish Pabrai explains how a business’s hidden moat, or competitive advantage, can often be identified through its financial statements. Businesses with strong moats generate high returns on invested capital, as seen in examples like Chipotle, which reinvests profits to fuel exponential growth. Pabrai draws … Read More

During this Q&A session with Columbia Business School, Mohnish Pabrai highlights the all-in mentality of entrepreneurs, such as a first-generation Chinese couple opening a restaurant, who invest nearly all their money and time into their ventures. This scenario mirrors millions of U.S. entrepreneurs, who rarely consider diversification yet sleep soundly … Read More

In his book – The Dhandho Investor, Mohnish Pabrai outlines seven key questions that investors should address before buying a stock. He emphasizes understanding the business deeply, accurately estimating its intrinsic value over time, ensuring it’s priced at a significant discount (over 50%), and being comfortable investing a large portion … Read More

In this Q&A session with Mis Propias Finanzas, Mohnish Pabrai provides a roadmap of his entire investment approach, focusing on his “circle of competence” and leveraging insights from experienced investors. He starts by analyzing shareholder holdings to identify reputable investors backing a company, often seeking writeups on Value Investors Club for … Read More

One of the best resources for investors are the publicly available 13F-HR documents that each fund is required to submit to the SEC. These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions. We spend a lot of time … Read More

In his book – The Dhandho Investor, Mohnish Pabrai explains that Dhandho arbitrage spreads, though temporary, offer valuable investment opportunities. The key question is how long these spreads will last and how wide their moat is. Quoting Warren Buffett, Pabrai emphasizes the importance of determining a company’s competitive advantage and … Read More

During this lecture to the students at Peking University, Mohnish Pabrai shared an anecdote by Charlie Munger, which highlights the power of focusing on a narrow “circle of competence.” He references Johnny Arrillaga, a billionaire who invested exclusively in real estate within a one-mile radius of Stanford University. Arrillaga’s success … Read More

During this session with YPO Delhi, Mohnish Pabrai explains the concept of compounding to his daughter during a late-night drive. He uses her summer internship savings of $5,000 as an example, explaining how investing it in an IRA with a 15% annual return could grow to $5 million by the … Read More

In this article titled – Steer Clear of the Short Side, Mohnish Pabrai argues against short positions as a hedge, suggesting a long-only unleveraged portfolio as a better alternative. With over 100,000 publicly traded stocks, it’s possible to hedge against various macroeconomic factors without using derivatives. Pabrai highlights the risks … Read More

In this session with the CFA in the U.K, Mohnish Pabrai discusses the importance of learning from investment mistakes, both personal and those of renowned investors like Warren Buffett and Charlie Munger. He highlights the inevitability of errors in predicting the future and the value of studying past mistakes to … Read More

In this article titled – Buffett Succeeds At Nothing, Mohnish Pabrai reflects on Blaise Pascal’s quote about misery stemming from an inability to sit quietly and applies it to portfolio managers. He discusses D. E. Shaw & Co., a firm that achieved spectacular risk-free returns through sophisticated bond arbitrage, allowing … Read More

In his book  – The Dhandho Investor, Mohnish Pabrai discusses why Ben Graham’s emphasis on a margin of safety is vital, aiming to minimize risk while maximizing returns, a strategy epitomized by Warren Buffett’s success. Assets usually trade at or above intrinsic value, but during extreme distress, like 9/11 or … Read More

In his book – The Dhandho Investor, Mohnish Pabrai explains why a critical law of investing, as demonstrated by Warren Buffett, is the importance of a small team size, ideally just one person. This approach allows for decisive and bold investments, exemplified by Buffett’s decision to invest 40 percent of … Read More

In his book – The Dhandho Investor, Mohnish Pabrai explains why value investing involves investing in businesses negatively perceived by the market, and these businesses often yield the most significant returns. Fama and French’s research shows that from 1963 to 1990, stocks with the lowest price/book ratios outperformed those with … Read More

During this presentation at The University of Nebraska, Mohnish Pabrai discusses his investment philosophy, emphasizing the importance of staying within one’s circle of competence. He mentions past investments in Maotai, Alibaba, and Tencent, noting their mixed results. Pabrai advocates for businesses that operate with zero debt, citing Berkshire Hathaway as … Read More

In his book – The Dhandho Investor, Mohnish Pabrai explains how fear and greed are fundamental to human behavior and significantly influence stock market pricing. Extreme fear can cause irrational actions, likened to a panic in a crowded theater where everyone rushes for the exits, leading to a market crash. … Read More

In his book – The Dhando Investor, Mohnish Pabrai advocates investing like playing blackjack – bet heavily when the odds are overwhelmingly in your favor. His “Dhandho” approach involves finding a temporarily distressed but good business with a durable moat, within your circle of competence. Determine its intrinsic value 2-3 years … Read More

During this interview with My First Million, Mohnish Pabrai discusses Warren Buffett’s investment strategy and performance, particularly highlighting a key point from Buffett’s 2023 letter to shareholders. Buffett noted that over his 58-year tenure at Berkshire Hathaway, only 12 investment decisions significantly impacted the company’s success. Despite making hundreds of … Read More

In this interview with My First Million, Mohnish Pabrai emphasizes that patience is the key trait for successful investing. He illustrates this by referencing a Seinfeld episode where Elaine’s boyfriend is content staring at the seat back in front of him during a flight, leading to their breakup. Pabrai suggests … Read More