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Mohnish Pabrai: The Swiss Army Knife Approach to Investing

In this interview, Mohnish Pabrai shares his investment philosophy and life lessons. Using personal examples from his investment career, he demonstrates how major setbacks – including a large loss in a startup before launching his fund and the significant portfolio decline during the 2008 financial crisis – ultimately strengthened his investment approach and led to substantial gains afterward. This philosophy of viewing adversity as a pathway to growth has become fundamental to his approach to both life and investing.

Key Takeaways:

  • Adversity often leads to growth and better outcomes—in both life and investing, setbacks can create opportunities for significant advancement if approached with the right mindset.
  • All intelligent investing is value investing: Focus on calculating future cash flows discounted to present value rather than arbitrary classifications between “value” and “growth.”
  • Extreme patience and simplicity are essential investor traits: Great investments may take years to materialize, and your thesis should be clear enough to explain to a child.
  • Concentrated portfolios of exceptional businesses build wealth: Most billionaires achieved their status through concentration rather than diversification.
  • Look for opportunities in unloved or ignored markets: “Go fishing where there are no fishermen” to find significant undervaluation, as demonstrated by Pabrai’s success in the Turkish market.

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Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

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