FT : Mohnish Pabrai - There’s a market-beater in your corner shop

FT.com has a piece about Mohnish Pabrai and his book "The Dhandho InvestorThe Low-Risk Value Method to High Returns" on June 22 2007.

I highlight some insightful points below:

  • Find a bet with the minimum downside possible and only then start to look at possible returns.
    • Patel business model and Lakshmi Mittal are good “Heads I win, tails I don’t lose much”examples.
  • Make big bets (“Few Bets, Big Bets, Infrequent Bets”).
    • Look for low risk, high uncertainty opportunities. (Like his recently interview on Bloomberg).
    • Look for companies with a “wide economic moat”:
  • Invest in simple businesses.
    • If it takes more than a short paragraph, there’s a fundamental problem.
    • If it requires me to fire up Excel, it is a big red flag that strongly suggests that I ought to pass.”

Full article link.

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