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1/ I really enjoyed @MohnishPabrai's Lecture to Boston College students -- below are some of my notes
Full video:
Full video:
2/ On Investing Mistakes
- He has had a few zeros because the businesses were overleveraged -- Mohnish has become a lot more cautious to leverage
- He has had a few zeros because the businesses were overleveraged -- Mohnish has become a lot more cautious to leverage
3/ On Valuing Companies
- Different approaches based on the business
- Do I understand this business?
- Can you understand the 2-3 variables that are going to drive the outcome, and is the CEO focused on those variables?
- Different approaches based on the business
- Do I understand this business?
- Can you understand the 2-3 variables that are going to drive the outcome, and is the CEO focused on those variables?
4/ On the Retail Landscape
- Retail is an automatic no for him
- In retail, there are no trade secrets
- The holy grail of what we want in business is recurring revenue, and retail is tough because the customer doesn't have a contract with you
- Retail is an automatic no for him
- In retail, there are no trade secrets
- The holy grail of what we want in business is recurring revenue, and retail is tough because the customer doesn't have a contract with you
5/ On Idea Flow
- Look at what other great investors are buying (he uses Data Roma)
- Goes A-Z on businesses within his circle of competence
- Anything in retail, pharma, and financials are an automatic no. He excludes a lot of stocks quickly and then goes deep from there
- Look at what other great investors are buying (he uses Data Roma)
- Goes A-Z on businesses within his circle of competence
- Anything in retail, pharma, and financials are an automatic no. He excludes a lot of stocks quickly and then goes deep from there
6/ On Getting Comfortable Investing Overseas
- Visting the company, meeting with management, and kicking the tires is very important when investing overseas
- Visting the company, meeting with management, and kicking the tires is very important when investing overseas
8/ On "Is Value Investing Dead?"
- Growth and value are joined at the hip
- You're better off having high ROE and high growth
- He has transitioned from .50 dollars to businesses with long runways
- He's on the "set it and forget it" train
- Growth and value are joined at the hip
- You're better off having high ROE and high growth
- He has transitioned from .50 dollars to businesses with long runways
- He's on the "set it and forget it" train
9/ On Moats
- It should be very obvious to you
- When you look out 10-15 yrs, what does the biz look like? What are the probabilities of that happening? What will ROEs be in the future?
- Start out with admiring the business/moat today, and then think about the future
- It should be very obvious to you
- When you look out 10-15 yrs, what does the biz look like? What are the probabilities of that happening? What will ROEs be in the future?
- Start out with admiring the business/moat today, and then think about the future
10/ On Selling
- It's all about opportunity cost
- You have to continuously look for new ideas
- "The mistress always looks hotter than the wife, you have to make sure that the mistress is actually hotter" (I lold)
- It's all about opportunity cost
- You have to continuously look for new ideas
- "The mistress always looks hotter than the wife, you have to make sure that the mistress is actually hotter" (I lold)
11/ On Competitive Advantages
- He likes businesses that clone well
- Howard Schultz brought the Italian cafe to the US $SBUX
- $MSFT is the ultimate cloner
- He likes businesses that clone well
- Howard Schultz brought the Italian cafe to the US $SBUX
- $MSFT is the ultimate cloner
12/ On His Investing Process
- He doesn't build Excel models "businesses are not linear, they don't grow 15% every year and so on"
- He reads VIC, Sumzero, and sometimes Seeking Alpha
- He doesn't build Excel models "businesses are not linear, they don't grow 15% every year and so on"
- He reads VIC, Sumzero, and sometimes Seeking Alpha
13/ His Investing Process Continued
- He likes to reverse engineer ideas from Data Roma
"You keep poking around and once in a while something hits you on the head with a two-by-four"
- He likes to reverse engineer ideas from Data Roma
"You keep poking around and once in a while something hits you on the head with a two-by-four"
14/ On the Kelly Criterion
- He doesn't use it and says it was a mistake to put it in his book
- KC works if you get to make a bunch of similar bets, like flipping a coin, but he doesn't think it applies to investing
- He would ignore it completely
- He doesn't use it and says it was a mistake to put it in his book
- KC works if you get to make a bunch of similar bets, like flipping a coin, but he doesn't think it applies to investing
- He would ignore it completely
15/ On Staying Within Your Circle of Competence
- It's okay to throw away a lot of stocks
- Be a harsh grader and only focus on the most obvious stuff -- the most obvious stuff is usually the things we are consumers of
- It's okay to throw away a lot of stocks
- Be a harsh grader and only focus on the most obvious stuff -- the most obvious stuff is usually the things we are consumers of
16/ On Judging Management Teams
- Don't focus on what they're saying, focus on what they've done
- Look at their track record
- Don't focus on what they're saying, focus on what they've done
- Look at their track record
17/ On Advice to the Students
- Pursue your passion
- What is really exciting for you? What do you really like to do?
- A lot of people plan to work in banking, get their MBA, and then work at a fund -- Mohnish recommends just going for it in the beginning
- Pursue your passion
- What is really exciting for you? What do you really like to do?
- A lot of people plan to work in banking, get their MBA, and then work at a fund -- Mohnish recommends just going for it in the beginning
