Chai with Pabrai Mohnish Pabrai's conversation at Schroders - The Value Perspective podcast on October 10, 2023
6 snips
Dec 26, 2023 
Mohnish Pabrai, value investor and founder of the Dakshana Foundation, discusses his introduction to Warren Buffett, the power of cloning as a mental model, examples of successful cloners like Microsoft and Walmart, the importance of portfolio concentration, and the risks of diversification. He also shares insights on improving probabilistic thinking, capital allocation, and macro-economic factors in investing.
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Cloning Works for Fanatics Only
- Cloning remains effective because most people are not fanatical or willing to go all in on it.
- Only intense dedication allows cloning to yield great competitive advantage.
Shift from Graham to Buffett Approach
- Great businesses with growth potential justify paying more than intrinsic value, unlike classic Ben Graham value investing.
- Holding exceptional businesses long-term leads to superior wealth creation despite premium prices.
Insurance Business Was Commodity Trap
- After acquiring an insurance company, Pabrai found it was a commodity price-taking business with little pricing power.
- He reversed course, sold the company near cost, and appreciated the learning from the experience.