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10 Questions to Mohnish Pabrai – Additional Answers

July 25, 2007

Comments

kfh227
Kfh227 premium member - 8 years ago
Before I even get a chance to read this, thank you!
kfh227
Kfh227 premium member - 8 years ago
"Do you speak to management to judge their quality, or do you use just their performance numbers? If you speak to them, what do you ask, and if you just use the numbers, which ones do you find most important?"

The answer is something most here probably agree with. The way you answered though, was total elegance.

And I like Mr Pabrai's take on cahrity. I plan to go more along the liens of hte Buffett route and give when I'm much older since I will be able to spend time compounding (and doing what I know best) to have even more money later. With which I can give to charity.

I keep thinking about my future and even if I could afford a million dolalr yacht, I don't think I'd want it. Much like Buffett. One day, I actually hope to be semi-retired and work at a lcoal sopup kitchen. People think I'm funny (sister in law thinks I'm the funniest person she has ever met. Maybe it's my love of Bill Hicks that causes my humor) so maybe I can bring a smile to some that don't smile that often.
munger
Munger - 8 years ago
Thanks for sharing your insights Nish. Your opening statement is an absolute must read for everyone here.
ARYSHOME
ARYSHOME - 8 years ago
Thank you Mr. Pabrai. How can I get a copy of your first Book? MOSAIC.
snowskater12
Snowskater12 - 8 years ago
Thanks for all of your great insight Monish. In the previous post you responded to two of my questions and I greatly appreciate the time and effort you put into your replies. Being an undergraduate Finance student I find that much of what is taught in school is not practical in the real world, and I believe that you approach investing can be more or less executed by the average investor. I have read dozens of books on value investing, buffet, etc... but I found your book “The Dhandho Investor” to be very well written and informative. Its simplicity was key, and I found that it really highlighted that one must look for low risk high uncertainty situations. I recommend this read to all guru-focus members.

Thanks again for giving back!

tbare06
Tbare06 - 8 years ago
Thank you Monish. There is no better lesson than from one who has learned them himself. I cannot wait for next years BH annual meeting!!!!!!!!!!
gateplayer
Gateplayer - 8 years ago
Thumbs Up!

I also would like to express my gratitude for your efforts to help myself and all other small investors find our path through the Wilds (and Wiles) of Wall Street. I also have read many dozens of books on investing and have permanently placed the Dhandho Investor on the top shelf next to: Buffett the Making of an American Capitalist, One Up on Wall Street, Reminiscences of a Stock Operator, Fooled by Randomness, The Davis Dynasty and few other must read classics.

I wish you the best success in your quest for value and look forward to seeing you, one day, a capitalist 'pop star' with a yearly 'Woodstock Festival' of your own. But please... somewhere other than Omaha...
mountaincloud
Mountaincloud - 7 years ago
Hi, Gateplayer, the Davis Danasy has been on my Wish List (Amazon) for more than 1 year, but haven't bought it yet.....how is the book in your opinion....it looked more like history book instead of investing
gateplayer
Gateplayer - 7 years ago
Mountaincloud -

As a student of the Market, I read everything that time permits me - texts about number crunching AND history books about successful investors. This is one of the later.

To do well, you have to know what the numbers mean. This is essential. However, to do exceptionally well, one has to have background knowledge - the Art(history) - to understand business cycles, numerical versus intangible inputs to value, methods of assigning risk, and how to allocate capital (portfolio manage). For example, Mr. Buffett tends to sit patiently on cash until the market throws him a 'fat pitch', other investors prefer to stay 100% invested, still others invest in 'Plan B's'(Pabrai) when no-brainers are unavailable.

Many of the outstanding investors recognize success as a blend of Art and Science. Theoretical Types will rely on 30 page Risk Profile spreadsheets detailing why they aren't wrong - even as the market hands them their head. Buffett, Davis, and Pabrai, I think, often purchase investment theses based upon what 'could happen' if business execution is good and at least in Pabrai's case 'how bad will the damage be' if I'm wrong. Shelby Davis took a chance in the uncertain insurance industry of the 1950's - the historical numbers weren't supporting his view. Ultimately though, he figured right and reaped the rewards in what he refered to as a 'double dip' windfall from his original thesis.

I believe that it is very important to spend the time to become familiar with history so...one doesn't repeat it.

Buy the book, it is worth the time invested. A thought - if you haven't read, "The Money Masters" by John Train, pick it up first. This is a great intro to some of the classic value guys: Buffett, Graham, Fisher, and Templeton.

thomas

"What we learn from history is that people don't learn from history"--W.Buffett
vuasu
Vuasu - 7 years ago
Thanks Mr. Pabrai for writing a book, The Dhandho Investor, that is easy to understand!

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