Collection: Mohnish Pabrai - #53 'Investment Shortcuts'

Video Link: https://youtu.be/Dxyvj-vLQKk

In this episode, Mohnish Pabrai explain investment shortcuts that investors can take and why should investors use them?

In this episode, you’ll learn:

  • What are the investment shortcuts Mohnish Pabrai took?

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(Source: https://youtu.be/dnS5xWIxo1I)


So one of the things in investing is that, you know, the data set is too large. And so, you know like that spreadsheet I sent Arvind have like 13,000-14,000 stocks and that's not even all the stocks in the world. All the stocks in the world, vary 50,000 or something – 25,000 to 50,000 something in that range.

And so, you know just looking at one business could take you 2-3 weeks. And so, you know if you spend even a week on a business, you couldn't look at more than 50 businesses in a year. And you know, in the US that be like 1% or something of the public companies.

And so, the key is that you have to take shortcuts which help you eliminate a large portion of the universe in a very short period of time. So it leaves a wide open portion of time for the things that do looked, like it's a promising kind of data set to go into.

So that I think it's a more art than science, but you got to have a way.

And so if you for example, did cloning and did 13-F that is a gateway to cult the data set. So if you just say okay, I'm only going to look what other great investors have bought. You know, then you might be down to maybe less than 100 stocks a year that you will look at.

And then within the 100, you again look at which one that's cheap by your definition and within circle of competence by your definition. Then again, that 100 is going to down quite dramatically. So you may not need to look at that many stocks in a year. And then the number become quite manageable.

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