Chai with Pabrai Mohnish Pabrai's Guest Lecture at University of Nebraska, Omaha on October 15, 2024
8 snips
Nov 19, 2024 
Mohnish Pabrai, a seasoned investment manager and author, dives into ethics in investing, spotlighting Costco's exemplary business model and discussing moral dilemmas in controversial industries like pharmaceuticals. He shares personal anecdotes about his investment journey, including his encounters with Charlie Munger, praising his intellect. Pabrai emphasizes the importance of early investing and compounding, along with the value of surrounding oneself with inspiring individuals. Listeners gain insights into navigating the complexities of investment and personal growth.
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Costco's Win-Win Model
- Charlie Munger viewed Costco as a rare ultimate win-win business model benefiting customers, employees, shareholders, and vendors.
- Win-win business models attract strong loyalty and outperform win-lose models that exploit one party at another's expense.
Ethics Over Economics in Investing
- Warren Buffett and Charlie Munger declined to invest in Conwood chewing tobacco despite its excellent economics due to moral objections.
- Owning companies that directly cause harm was unacceptable, illustrating investing decisions balanced ethics with economics.
Passing on Profitable but Unethical Business
- Conwood chewing tobacco was a phenomenal financial success, growing profits manyfold over 20 years after Buffett and Munger passed on it.
- Their choice shows that rejecting morally questionable but profitable businesses can still align with long-term success.
