10 Commandments of Investment Management

By Morningstar |  11-10-18 | 

Mohnish Pabrai was recently asked the quintessential “where do you think the market is headed” question.

His answer was classic Pabrai-style brazen: I don’t know.

That should not surprise you.

He gives no attention to the macro perspective but always scouts for significant mispricing. Earlier this year, he revealed that just 0.1% of his portfolio is in U.S. stocks. Not that he is not bullish on the American economy in generally, but he is steering clear cause stocks are not heavily mispriced and underpriced.

He describes his approach as “heads I win, tails I don’t lose much”, which ties in with his idea of “low risk, high uncertainty” investing which he picked up from entrepreneurs. Entrepreneurs generally do not gravitate towards a high-risk, high-return scenario but do everything they can to minimize risk; they focus on low-risk bets which have high-return possibilities.

Does that mean he shirks volatility? On the contrary. Volatility does not faze him at all and he calls it the friend of the long-term investor.

Listen to Pabrai share his insights on how he successfully combines the old value tenets of Benjamin Graham and Warren Buffett with a modern, holistic approach to stock investing.

Mohnish Pabrai is the Founder and Managing Partner of the Pabrai Investment Funds and the Founder and CEO of Dhandho Funds. 

He will present on The 10 Commandments of Investment Management on October 24 at the Morningstar Investment Conference.

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