InvestED: The Rule #1 Investing Podcast 10- 26 Is The Magic Number
Jun 26, 2015
Mohnish Pabrai shares the significance of the number 26 on his license plate and how it relates to Warren Buffett and Charlie Munger's investing principles. The episode explores the distinction between company value and price, the importance of buying investments below their intrinsic value, and strategies for achieving higher returns in investing.
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Charlie Munger's Four Investing Rules
- Effective investing requires understanding a business and finding those with durable competitive advantages or moats.
- Buying at a sensible price with a margin of safety is essential to avoid losing money.
Difference Between Price and Value
- Price is what you pay, value is what you get, and knowing value is crucial to paying a sensible price.
- Rule #1 investing is about buying valuable assets at much lower prices, like buying $10 bills for $5.
Investment Time Horizons Matter
- Fund managers often fail to beat the market because their investment horizons are short, usually just months.
- Buffett and Munger invest with a decade-long horizon, enabling them to outperform by holding long term.