Chai with Pabrai
Mohnish Pabrai’s Q&A at Mendoza College of Business - University of Notre Dame on September 29, 2023
Nov 14, 2023
Mohnish Pabrai, an investment fund manager, answers various intriguing questions at Mendoza College of Business. Topics discussed include when to sell a stock, starting Pabrai Investment Funds, Berkshire's twelve great decisions, identifying compounders, Charlie's mental models, cloning Chipotle vs. Baja Fresh, Fiat Chrysler, NVR, and the decline of bridge. The insightful conversation also touches on Warren Buffet's recent investments in Japanese trading companies, the auto industry, McDonald's French fries, and the future vision for funneling capital towards social causes.
59:43
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Quick takeaways
- Hold on to compounders despite overvaluation to benefit from their future growth potential and avoid missing out on significant returns.
- Start small and treat your investment fund as a hobby, allowing room for growth and scaling into a proper business.
Deep dives
Not Selling Compounders: Why Long-Term Value Matters
Monish discusses the strategy of not selling compounders, even when they are overvalued. He explains that great businesses with long runways are rare and it can be challenging to determine their intrinsic value accurately. Mistakes in valuation can occur, and there may be unknown factors that could work in favor of these businesses. While it is important to sell when a business is egregiously overvalued, giving benefit of the doubt and maintaining long-term positions in compounders can be beneficial due to their potential for future growth and the risk of missing out on significant returns.
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