RARE interview with the "Indian Warren Buffett" - Mohnish Pabrai
About This Episode
Shaan Puri interviews billionaire value investor Mohnish Pabrai about his journey from entrepreneur to world-class investor. The discussion delves into the early business habits of Warren Buffett, the 'Dhando' philosophy of minimizing risk while maximizing returns, and the profound impact of long-term patience on wealth compounding.
Episode Description
Show Notes
- 0:00Intro
- 1:41Why entrepreneurs make the best investors
- 4:130How Warren Buffett’s pre-paid for his college education
- 8:45Becoming Ben Graham’s Protege
- 12:41What Buffett learned about branding from See’s Candies
- 15:45Buffett’s failed play to be a candy mogul
- 18:44Identifying offering gaps
- 20:22Getting an MBA at age 14 as the son of an entrepreneur
- 23:33The 3 tells of a future millionaire
- 25:56Mohnish builds his first product with maxed out credit cards at 24
- 27:59The 168 hour framework
- 31:13“Entrepreneurs do not take risks”
- 32:38How Richard Branson launches Virgin Atlantic with no money
- 35:31How 0.1 percent of the population owns 70 percent of all the motels in America
- 38:31The unfair advantage of being a low-cost producer
- 40:20How Mohnish turned his first million into $13M in 5 years
- 43:39Pabrai Funds grows to $600M in assets in less than 10 years
- 47:35What Mohnish knows about fundraising that we don’t
- 50:26Pivoting from tech investments in 1999 to value investments
- 53:13$2M lunch with Warren Buffett
- 58:09Be a harsh grader of people
- 1:01:53The Givers, The Takers, and The Matchers
- 1:04:40“Heads I win, tails I don’t lose much”
- 1:09:26Private markets v public auctions
- 1:13:35The #1 trait that makes a great investor
- 1:15:01What people of Reddit think of Mohnish Pabrai
- 1:16:31Starting capital, annual rate of return, length of runway
- 1:17:24The Rule of 72
- 1:21:50Circle the Wagons Philosophy
- 1:23:35Losing $3B in one unfortunate event
- 1:28:49Be fearful when the world is greedy; Be greedy when the world is fearful
- 1:29:17What a value investor thinks of bitcoin
- 1:30:26Nick Sleep bets
- 1:42:30The Best Of: Capital Allocators
Links
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Key Takeaways
Capitalize on the 'Specialization Window': The human brain undergoes critical development between ages 11 and 20, making this the most effective time to build foundational business or technical skills that provide a permanent competitive advantage.
Apply the 'Heads I Win, Tails I Don't Lose Much' Framework: Successful entrepreneurs and investors focus on risk reduction rather than risk-taking, seeking asymmetric opportunities with capped downsides and significant upsides.
Master Strategic Inactivity: High-level wealth creation is often the result of just a few key decisions followed by years of doing nothing, as the most impactful part of investing is allowing great businesses to compound without interference.