Value Investing, Videos

Mohnish Pabrai – Being Different From The Crowd

In this talk from May 24, 2016, Mohnish Pabrai discusses being different from the crowd and the three basic attributes an investor should possess to effectively beat the odds:

  1. Patience
  2. Decisiveness
  3. Being different from the crowd.

Being Different From The Crowd

Mohnish Pabrai: Being Different From The Crowd – The Basic Three Attributes of Successful Investor

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Transcript

Well it's a pleasure to be here. And and and actually quite an honor so you know my my family and I moved to Irvine in in 2003 and I I have a couple of lectures and a few a couple of business schools. One is in New York and the others in Delhi. It's very nice to have a shorter commute. It did take 13 years to get here but thank you.

Thank you Professor Yang for for making that happen. And I'd also like to say that you know there's very few there are very few enlightened business schools that have anything in terms of either coursework or professors who focus on value investing. So from that vantage point I think it's wonderful to see that UC Irvine is in that genre right. So it's a very small group and I think Professor Yang may have something to do with that. So let's give him a round of applause.

Thank you for making that happen. So I haven't given this talk before. So to some extent your guinea pig. So thank you for being the guinea pigs. And and it's it's it's it's somewhat different from a lot of other talks I've I've given and I've always felt that the best way to learn is to teach and so quite frankly one of the big reasons I wanted to put this together was to actually educate myself and and actually I got quite an education in putting the talk together. And and I think I'll get a little bit more of an education in the in the interaction today. So that would be great. So the the focus of the talk is really to you know it would appeal to I would say a few different audiences. One is if you were considering a career as an investment manager or an investment analyst I think that talk would be helpful in in helping you figure out whether that is the path you want to go down. And even if you are a person who has some assets and some savings and trying to figure out kind of how to how to invest those I think the the top will add some value on that front as well. So most of the material I'm going to present is plagiarized because I have no original ideas. You'll soon you'll see little Tsundue on that. And so I'm actually going to be channeling a guy named Peter Kaufman and another guy named Charlie Munger and a little bit of Warren Buffet thrown in.

So Peter is the author of Poor Charlie's Almanac.

Some of you might be familiar with that and it's a wonderful book I think it's one of my favorite books and one he's very close friends with Charlie Munger and I think one time he told Charlie Munger that you know Charlie and Warren have been successful for three reasons. And do you know what those three reasons are. And Charlie told them no. Peter why don't you enlighten me. And so Peter said Well the three reasons you guys have been so successful is that first you're willing to be extremely patient. You guys are not in a hurry to do anything you're willing to be very patient. The second is that you're willing to be very decisive. So when when opportunity presents itself you don't hesitate to act. And Munger has referred to this kind of like a man of the spear standing there waiting for a salmon to go by. And so he's got the spear ready and he's perfectly happy waiting there for hours. And then you know or a big juicy salmon goes by and he Spear's it and so you know extreme patience coupled with extreme decisiveness. And the third trait is having no concerns about being different from the crowd. So you know doing whatever they feel makes sense regardless of how the world looks at it. So they don't really care about you know the what people might say if they do something. So and what Peter what Peter Sellers did you really have to kind of unpack that a little bit. So when when he says being.