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Jan 2021
1h 11m

Mohnish Pabrai - The Value of Continuous...

Columbia Business School
About this episode

There are several great investors out there who are effectively offering free lessons through their positions, letters, and interviews. What's surprising is that while many people listen to them, hardly anyone puts those lessons into practice.

Today's guest, Mohnish Pabrai, is not one to miss such opportunities and he attributes much of his success to his hunger to learn, improve, and adjust. Mohnish is an author and the Founder and CEO of Pabrai Investment Fund, which he started in 1999 at the peak of the tech bubble. In 1983 he moved to the United States from India, to study computer engineering at South Carolina's Clemson University. After working in research and development, Mohnish launched his own successful IT consulting firm, TransTech, in 1991.

One of the most original investors out there, Mohnish arrived relatively late in his professional career to the world of investing but he has made such an impact ever since. Through Pabrai Investments, Mohnish has built one of those records that is the stuff of legends.

On this episode, Mohnish and I discuss how his early years alongside his entrepreneurial father have shaped him as an investor, why he decided to make the switch to a career in investing, how he was introduced to the world of value investing through the works of Peter Lynch, his growth as an investor since starting Pabrai Investments as a hobby investor, how you can use cloning to your advantage, and so much more!

 

Key Topics:

  • The meaning behind the title of Mohnish's book "The Dhandho Investor" (3:02)
  • What Mohnish learned from his father's entrepreneurial ventures (4:20)
  • Mohnish's invaluable hands-on business experience as a teenager (8:05)
  • How an engineering background offers an advantage as an investor (10:40)
  • Mohnish's decision to remain in the US after university (11:51)
  • The importance of looking at the big picture (13:03)
  • Moving from computer engineering to international marketing (14:36)
  • How Mohnish's father changed the path of his career (15:41)
  • Why Mohnish decided to start his own company (18:17)
  • The early days of TransTech (20:14)
  • An introduction to Peter Lynch and Warren Buffet (22:22)
  • Testing out the Buffet approach to investing (23:48)
  • Transitioning into asset management (27:35)
  • The 1999 start of Pabrai Funds as a hobby (30:04)
  • Starting out as a traditional value investor (32:46)
  • Our aversion to cloning (34:17)
  • The significant competitive advantage you can gain by cloning (36:24)
  • Understanding the patterns of different investors (39:10)
  • Mohnish's approach to idea selection (40:51)
  • Reaching clarity before making investment decisions (44:10)
  • Examining Fiat Chrysler as a case study for Mohnish's investment process (47:31)
  • How Mohnish utilizes guardrails (50:59)
  • A value investor's approach to risk management (52:46)
  • Finding 50 cent dollar bills (54:29)
  • Focusing on compounders (56:55)
  • What we can learn from NICE Holdings (59:37)
  • What you need to know about "spawning" (1:01:43)
  • Why investors need to think like entrepreneurs (1:05:06)
  • Why this is an interesting time for value investing (1:07:23)
  • How Mohnish thinks about the future of value investing (1:09:41)
  • And much more!

 

Mentioned in this Episode:

 

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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