

Mohnish Pabrai's Interview at the Investor’s Podcast on April 25, 2023
Jun 5, 2023
Mohnish Pabrai, the founder of Pabrai Investment Funds and author of 'The Dhandho Investor,' shares insights on navigating investment landscapes. He discusses the impact of cognitive biases on decision-making and emphasizes the importance of long-term strategies, using Turkey as a unique case study. Pabrai also explores share buybacks, executive compensation, and how to handle investment errors. He stresses the significance of honesty in both personal relationships and financial discussions, advocating for transparency to foster trust.
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Brains Bias Investing Decisions
- Our brains evolved for survival, not investing, so they have many biases that impair investment decisions.
- Awareness of these biases, through books like Munger's essay and Cialdini's work, helps but does not eliminate errors.
Market Efficiency and Mispricing
- Stock markets are voting machines short term and weighing machines long term, leading to eventual price corrections.
- In less efficient markets like Turkey, frequent trading leads to greater mispricing compared to developed markets.
Few Investments Drive Most Returns
- Investing success is dominated by a few extraordinary decisions amid many average ones.
- Holding top performers like Walmart or Titan long-term can vastly outperform broad indexes.