Chai with Pabrai Mohnish Pabrai’s Q&A with members of The Babson College Fund (Babson College Students)– Feb 9, 2021
4 snips
Jun 27, 2023 AI Snips
Chapters
Transcript
Episode notes
Value Meets Growth Investing
- Value and growth investing are two sides of the same coin, both reflect the discounted future cash flows of a business.
- Paying less than the intrinsic value of future cash flows constitutes value investing and is a timeless strategy.
Microsoft Overvaluation Story
- In 2000, Pabrai warned Microsoft employees that the stock was overvalued despite great business performance.
- Microsoft’s stock dropped 70-80% over 15 years, illustrating the risks of high valuation despite good fundamentals.
Surviving Market Volatility
- Accept that auction-driven markets regularly cause large price volatility, including 50% drops.
- Avoid leverage to survive drawdowns and focus on buying undervalued assets during market pessimism.