Video – Mohnish Pabrai On Forbes (#valueinvesting)

Intelligent Investing with Steve Forbes presents Mohnish Pabrai, managing partner, Pabrai Funds

Major take-aways from the interview:

  • Attitude is the most important attribute of any investor
  • The value investor’s attitude advantage is the ability to wait for the right opportunity
  • “All man’s miseries stem from his inability to sit in a room alone and do nothing” channeling Pascal into an investor appropriate format: “All investment managers’ miseries stem from an inability to sit alone in a room and do nothing”
  • Ideal investment industry: gentlemen of leisure who go about their leisurely tasks and when the world is severely fearful is when they put their leisurely tasks aside and go to work
  • People think entrepreneurs take risk; in reality, they do everything they can to minimize risk– low risk, high return bets
  • Pabrai Funds has a “moat” by mirroring Buffett’s 25% performance after 6% hurdle because it aligns his interests with his clients; total fund expenses are 10-15 basis points, with Pabrai’s salary and staff paid for out of performance fees
  • Shorting makes no sense because maximum upside is a double and maximum downside is bankruptcy
  • Do not talk to company management because they are high charisma sales people and will pitch you on optimism, not realism
  • Big fan of the Checklist Manifesto, has a checklist of 80 items he looks over before making an investment
  • Pioneers are the people who get filled with arrows