Collection: Mohnish Pabrai - #88 'Advice For Students'
[Transcript]
MOHNISH PABRAI 00:00
I think the advice I have because I'm a cloner is – I will just clone the advice Warren would give you or Charlie would give you which is to focus on going to work for people you like, admire and trust.
And one of the things if you unpack what Warren said about like, admire and trust is when he says goes to work for people you like, admire and trust notice that it doesn't talk about what the comp is – it doesn't talk about what the company is – whether it's a blue chip or not, a startup or not. It's about the people.
And so you have to go work for people and with people that you would truly enjoy working with if you are not getting paid. So I think that should be the criteria.
The second thing, again what Warren says is that don't put things off. You know, in his words he said that's like saving sex for old age, not a good idea. You know, so basically don't say I'm going to work 3 years at Goldman Sachs then I'm going to get my MBA, then I'm going to go do X for 3-4 years and then I'm going to start a fund and then this and then that.
You know, since we have all night Arvind, I wanted to tell you the story of this very stressed out investment banker.
So there's this guy in New York who is an investment banker, working like 100-120 hours a week, totally burnt out. You know, just flaming out, you know, just with this intense. And he is, of course, making a lot of money but he is just stressed out beyond belief.
So he does some research and he finds this little tiny Mexican fishing village, which is in a very remote part of Mexico where there is a small like you know, one room resort. And no humans just – it'll be just – he'd be the only guest. And there's no one around for miles. He said that's the place for me.
So he goes over and he books himself for a week at that place to recuperate from New York. And in the morning he gets up and he notices that there's a hut just off the beach, and this guy – this Mexican guy in this hut.
Have you heard this story before? [Arvind shake his head] No, yeah, I know all my stories are original.
So he sees this Mexican guy in this hut and this Mexican guy pulls out a small boat – small little canoe – and he takes it out in the ocean and then he's gone for like an hour or an hour and a half. And he comes back with two fish and then he makes a little fire, and you know cooks one fish and then that's his lunch. Then he goes and takes a nap when he wakes up in the evening cooks the second fish and that's his dinner. And then you know, he's just hanging out at his hut and go to sleep.
And then the next morning, the banker notice it again. In the morning the guy wakes up, takes his boat goes out in the ocean and you know gets the two fish comes back, again cooks one fish, takes the nap, second fish...
And after 3 days the banker can't take it anymore. Okay, so he goes and talks to the only human he can which is the Mexican fisherman. And so he says that you know, when you go out in the ocean, could you catch more than two fish?
And the Mexican fisherman says yeah, the ocean is full of fish, I can catch a lot more fish.
So he says why don't you catch more than two fish?
He says I only need two fish, why would I need to catch more than two fish?
So the banker says look, if you catch more than two fish then you would have some extra fish, you would only eat the two fish but you could sell it in the market, you know.
So the fishermen says and then what?
He says well, you know then you'd have some money and you know, as you keep getting these more fish and you get more money, what you can do is you can get a second boat and hire a guy. And he's going to go out in the boat and fish as well and he's going to catch a bunch of fish too. And now, you would have more fish because you'll paid the guy where you'll have some left over and you'll have more to sell in the market.
So the fishermen says and then what?
He says then you know, we're going to keep doing this and of course, we're going to have a fleet which is going to be bringing the fish but then we're going to vertically integrate. So instead of selling the fish into the market, we're going to set up a canning operation and we're not going to let those comebacks take all the margin by doing the canning themselves, we're going to do the canning.
And you know, we are in this great part of the country, we're going to create a great brand. And we're going to have this, you know organic, you know, fish and all this stuff. And we're going to can it and we're going to, you know, send it out to all over the world.
So the fishermen says and then what?
He says and then you know, I'm going to take you public. You know, I'm your man, you know, I can take you public, we can do an IPO and then, you know, you're going to have a lot of money and you know, great life and such.
He says and then what?
He says then you know, when you want to take a vacation, you can come here and hang out. And the fisherman just looks at him, that he's already there.
ARVIND NAVARATNAM 05:39
That's a great story, Mohnish. I actually do think you told me the story but it's – It such a great story Mohnish, I actually do think you told me this story. You know, I never kind of figuring it. (Laughter) There's so many layers and that's the –
MOHNISH PABRAI 05:54
So the question – one of the things I wanted to say to the class is, don't be like the banker. Be like the fisherman, you know, so think of life in terms of the essence of life. And the essence of life is, there are some basic fundamentals.
The first essence of life which the banker forgotten is, life is finite. Okay, it's not infinite.
The second essence of life is that like my dad used to say, we come to this world naked and we leave this world naked, no one's taken even a pin with them. So basically whatever we get in this world is going to get recycled back in one way or another.
So we don't know how long we are on Earth, we don't know how we'll leave. And so the best thing you can do is not defer things into the future, but take it into the present like the fisherman has.
And so always keep the basics in mind which is, you know, we live in a country where no one's going to starve. And certainly none of you're going to starve, none of you're going to be homeless, none of you are ever going to have difficulty making ends meet.
So once your basic are covered, it doesn't make sense to pursue careers or go to work at companies or go to work for people where you are questioning the quality of staff, right?
So if you're not high quality all the way, then you should make a change and hit the reset button and go from there.
I think that's about it.
(Source: https://youtu.be/7F2IGzES7Uc)
[YAPSS Takeaway]
1. Work for people you like, admire and trust if you are able to cover your basic needs.
2. Don't put things off, life is finite.
