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Mohnish Pabrai on Maximizing Returns and Avoiding Mistakes

January 19, 2013 | About:

In this interview, Guru Mohnish Pabrai provides some helpful ideas that he employs to improve his investment returns.

- After getting his "head handed to him" in 2008 with his funds down 60% versus 38% for the market, he did some soul searching trying to figure out what his investment approach was missing.

- To improve his performance he undertook a study of great investors and specifically looked into instances where they incurred a permanent loss of capital (he also looked into his own mistakes).

- He was surprised to discover that in most instances it could have been apparent at the time of investment that a permanent loss of capital was quite possible from these investments and additionally the reason for the loss was quite basic.

- From his documentation of these losses he developed a checklist that forced Monish to consider these basic issues prior to investing.

- His checklist has 97 or 98 questions and it forces him to consider these issues prior to investing.

- He believes his checklist has significantly brought down his error rate.

About the author:


Rating: 2.7/5 (3 votes)


20punches - 3 years ago
Great insight but 15-20 minutes for 97-98 questions ( 12 seconds per question if 98 questions in 20 mins) ? That sounds a little implausible.
Appooj - 3 years ago
I'd rather focus on the other impressive fact: only 2 mistakes out of 30. Seems like a very well grounded scientific philosophy.

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