Chai with Pabrai

The Ten Commandments of Investment Management

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Jan 20, 2023
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ADVICE

Avoid Skimming Fees

  • Avoid skimming fees from client capital; it misaligns incentives and compounds against investors.
  • Prove your skill by compounding your own money first so you don't need to rely on top‑fees.
ADVICE

Ditch Investment Teams

  • Avoid large investment teams because investing is an individual pursuit with differing circles of competence.
  • Keep research and decision‑making personal to preserve accountability and clarity.
INSIGHT

Accept A High Error Rate

  • Expect to be wrong about roughly one third of your investments because forecasting business futures is inexact.
  • Accepting this humility keeps position sizing sensible and reduces destructive overconfidence.
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