The Q&A session at the recent Pabrai Funds annual meeting featured the following priceless exchange between the value investing guru and a boy sitting in the auditorium with his father:
Boy: If a person my age is thinking of becoming an investor, what are the main things I need to do to prepare?
Pabrai: How old are you?
Boy: Twelve.
Pabrai: I was two and a half times your age when I got to that question, so you’ve got a solid head start. Well, you’re at the meeting, so this is a good place for you to hang out. Are you having a good time?
Boy: Yes.
Pabrai: Have you been to Omaha [meaning, the Berkshire Hathaway annual meeting - PD]?
Boy: No.
Pabrai: Are you planning to go next year?
Boy: I don’t know.
Pabrai: Make sure your Dad takes you. Do you have a brokerage account?
Boy: Yes.
Pabrai: How is it invested? Please get this boy a microphone – we’re going to have an extended conversation.
Boy: Wells Fargo (WFC, Financial) … Bank of America (BAC, Financial) … Fairfax (FFH, Financial) … and Berkshire Hathaway (BRK.B, Financial).
Pabrai: That’s four stocks. Is that enough? Do you know about the companies?
Boy: Not too much ‘cause my Dad does it, but he taught me about it.
Pabrai: What about buying Apple (AAPL, Financial)? Do you have an iPhone?
Boy: Yes.
Pabrai: Why not buy the things that you use? Like, have you seen the iWatch?
Boy: Yes.
Pabrai: Do you like the iWatch? Are you going to get one?
Boy: Probably not.
Pabrai: What about the iPhone 6?
Boy (checks with Dad): No.
(Laughter from the audience)
continue reading: http://www.forbes.com/sites/phildemuth/2014/11/24/mohnish-pabrais-million-dollar-advice-for-a-12-year-old-investor/