Mohnish Pabrai: Cloning, Learning from Charlie Munger, 100 Baggers
My guest in this episode is Mohnish Pabrai, who I first met at the Berkshire Hathaway AGM in 2014 in Omaha, Nebraska. Mohnish is the Founder and Managing Partner of Pabrai Investment Funds and the author of "The Dhandho Investor," which is just as useful if you're interested in learning about investing as it is for entrepreneurs. He was featured in William Green's recent book "Richer, Wiser, Happier," which William discussed in one of the previous episodes of this podcast.
Mohnish plays bridge with Charlie Munger, and he's a shameless cloner. He describes what being a cloner means and how he thinks about investing, how he learns from others and how he changed his mind about business, investing, COVID and many other things.
What Is Covered:
- Mohnish’s family background and what he learned about business from his parents
- How Mohnish discovered Warren Buffett and decided to clone his approach to investing
- Why there are not many cloners in the worlds of investment and business
- Examples of cloners among the biggest companies in the world
- The investing lessons learned from the dotcom boom and bust
- The concept of 100 baggers and how mindset plays a crucial role in investing
- What he has learned from getting to know Charlie Munger
Key Learnings and Takeaways:
- Most humans have an aversion to cloning; 2-3% have quirky wiring and are aggressive about cloning, and 95-97% don't care about it - when they identify something interesting that someone else is doing, they believe the opportunity is over.
- The Holy Grail of investing is to own a business with favorable economics, bought at a reasonable price and held for a very long time, with some good growth engines.
- The error rate in the investing business is very high; if each time something goes wrong we zoom in to get lessons, many times we are going down rabbit holes that are not productive. We need to learn when we stumble, but not learn too much.
Links and Resources Mentioned in This Episode:
- Pabrai Investment Funds https://pabraifunds.com/
- Mohnish Pabrai's Website http://www.chaiwithpabrai.com/
- “The Dhandho Investor: The Low-Risk Value Method to High Returns” by Mohnish Pabrai https://www.amazon.com/Dhandho-Investor-Low-Risk-Method-Returns/dp/047004389X
- “Berkshire Hathaway Letters to Shareholders” by Warren Buffet https://www.amazon.in/Berkshire-Hathaway-Letters-Shareholders-1/dp/0615975070
- “Nomad Investment Partnership Letters to Partners by Nick Sleep and Qais Zakaria https://igyfoundation.org.uk/wp-content/uploads/2021/04/Full_Collection_Nomad_Letters_.pdf
- “100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunity” by Thomas William Phelps https://www.amazon.co.uk/100-Stock-Market-Distinguished-Investment-ebook/dp/B09BNRXZJ4/
- “Richer, Wiser, Happier: How to World’s Greatest Investors Win in Markets and Life” by William Green https://www.amazon.co.uk/Richer-Wiser-Happier-Greatest-Investors-ebook/dp/B08FXTLBH2/
- William Green: Richer, Wiser and Happier on OutsideVoices Podcast https://outsidelens.com/richer-wiser-happier-practical-wisdom-from-some-of-the-worlds-greatest-investors/
- Joel Greenblatt: The Common Sense of Long-Term Investing on OutsideVoices Podcast https://outsidelens.com/joel-greenblatt-the-common-sense-of-long-term-investing/
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