Mohnish Pabrai Shares His Ten Commandments With London Business Students

Mohnish Pabrai‘s webcast Q&A session with the students at London Business School.

Ten Commandments

Mohnish Pabrai Shares His Ten Commandments With LBS Students

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Transcript

You know pleasure and honor to be with you. It's wonderful you know LBS one of the best schools the best business schools on the continent which is great and what I'll do is I'll just go through a very quick slide show and and then we will go through DNA and pretty much any question is fine as long as I mean other than asking me what I'm buying right now and what we hold right now. I think anything else is fair game. I don't know. Maybe I'll ask for a show of hands. I had I had done a talk with the students at Boston College. I do a talk with them every year. So I've done a talk with them. Thing November December last year and that talk was about the Ten Commandments of investment management. How many of you if you just raise your hand have seen that YouTube video. OK. We have some enlightened souls which is pretty good so I'm not gonna go through what's in that talk. I think for the rest of you you can you can go through the talk but just taking a couple of days back.

Someone had sent me a nice note where he took my Ten Commandments and he said it in worse. And he said that you know if you give things in worse to humans they're easier time than of remembering it and it gets. Much easier to etch into your psyche if it's even worse. I'm just gonna quickly go through the the Ten Commandments the first one is commandment one thou shall not skim off the top.

And you know this one refers to not having you know management fees having all the fees being performance fees and I won't really explain these I said these are well explained in the Boston College video for those if you haven't seen it you can go through that video but it does go through Giannis take on these though. Johnny Bonner is the one who sent me the revised commandments set in war. So his commandment one that the quantity of assets under your belt does not entitle big fees to be dealt. Then we go to slide number five which is commandment to thou shall not have an investing team and and Giannis take outsourcing investment understanding will result in a hard landing.

Then we go to slide six which is commandment 3 thou shall expect except that thou shall be wrong at least one third of the time. And Johnny actually had two of these. But this one he said. An investment record winning 2 of 3. A rich man or woman you soon will be. And also as long as you're right a bit more than wrong. Your lifelong return will likely be strong and I think the second lot actually is actually more true. I think that's great if you're even slightly more right than wrong things have already well for you. And then commandment for Thou shall look for hidden. One stocks you know. And I think Johnny does it better than I could. He says that companies selling for what it will earn in a single year. If uncovered will prove to be deal. Then we go to Slide 10. Thou shall never use Excel. Of course no one in this room ever used Excel so we don't even need commandment 5. Gold investment decisions do not need Excel's precision. And then commandment 6. Thou shall always have a rope to climb out of the deep as well. And Giannis take. You must prepare for times of despair when there is hope for when their hope is rare.

And then commandment 7. Thou shall be singularly focused like Arjuna. Maybe some of you are familiar with my ballot and Giannis take a man with focus will see through the hocus. And then commandment thou shall never short a stock. And here Johnny goes wild and crazy. Knowing a company would fail. He placed a short sale. But what was under the wheel was not the fail but the time scale. This is what the Tesla sharks forgot.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver