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Collection: Mohnish Pabrai - #129 'Advice for Investors'


Video Link: https://youtu.be/KLhyGLZ7cyg


In this episode, Mohnish Pabrai was asked what he regard as the biggest mistake for people who want to be professional investors and people who have other priorities in their life?


In this episode, you’ll learn:

  • Investment advice for professional investors and non-professional investors.

To check out all Collection: Mohnish Pabrai <click here>

 

[Transcript]

(Source: https://youtu.be/jfxOvdiac94)

PROFESSOR YANG 00:00

What you regard as the biggest mistake for people want to be professional investors and people who have other priorities in their life?


MOHNISH PABRAI 00:07

Yeah, so I think the professional investor – so that’s actually what I was trying to get across in this talk is that, you know, it’s – I think investing is one of the most interesting disciplines because it crosses boundaries.


I mean you saw in this talk the range of, you know, issues that come up in making an investment it goes across disciplines, across all kinds of, you know, understanding human nuances and so on.


So I think of investing actually is being one of the broadest disciplines and so if you are a person who enjoys that, you know, enjoys waiting across different disciplines, reading, learning, understanding how humanity works and how the world works then this may be the right place to you.


And also then look at those three factors right, you know, the patience and then the decisiveness and then willingness to be different. If those are you, then it makes sense.


And the for the crowd that doesn’t want to be in this field, there’s nothing wrong with that. There’s a hundred different ways to live your life and you know investing is just one of them.


PROFESSOR YANG 01:25

Also, what you regard as the biggest mistake like the biggest land mine to avoid, so this is the like inversion thing where you want to try and avoid the big mistake. So for the non-professional investors, what would you regard this?


MOHNISH PABRAI 01:38

Well, the non-professional investor, I would say indexing is a very good way to go and I would say that even if you are trying to pick investment managers, I think that’s a very difficult exercise to embark on, it’s not the subject of the talk we went through today, but so I would say that if you are a know-nothing investor or investor who doesn’t do this fulltime or and such, then certainly taking an index approach is a very good way to avoid a lot of pitfalls.


And the key is like I told you with the example of compounding, you know, Einstein called the 'Eighth Wonder of the World,' the key is that if you are spending less than you earn and you just sock it away and with the ups and downs of the stock market, I mean the S&P over last hundred years still done 9% a year, so you’ll still end up at a decent place.

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