About
Monish Pabrai is an Indian-American value investor, fund manager, and entrepreneur who has become one of the most prominent disciples of Warren Buffett's investment philosophy. Here's who he is:
Monish Pabrai was born in Mumbai in 1964 and immigrated to the United States, where he initially built a successful IT consulting business before selling it in 2000 to focus on investing full-time. He founded Pabrai Investment Funds in 1999, modeling his approach directly on Buffett's partnership structure and investment philosophy. His funds have delivered exceptional long-term returns by focusing on deeply undervalued businesses with strong competitive positions.
Pabrai is known for his "shameless cloning" approach, where he openly studies and replicates the investment strategies of successful investors like Warren Buffett, Charlie Munger, and Joel Greenblatt. He emphasizes buying businesses trading at significant discounts to their intrinsic value, with a particular focus on companies facing temporary problems that create buying opportunities. His investment style combines rigorous fundamental analysis with extreme patience and concentration.
Beyond fund management, Pabrai has become an influential teacher and philanthropist in the value investing community. He regularly speaks at investment conferences, has written extensively about value investing principles, and established the Dakshana Foundation to provide educational opportunities for underprivileged students in India. His annual investor meetings and letters are widely followed for their insights into value investing and business analysis.
Monish Pabrai's Best Quotes
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"Heads I win, tails I don't lose much. That's the essence of great investing."
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"The single most important thing in investing is to buy businesses when they're selling for significantly less than they're worth."
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"Cloning is not just acceptable in investing, it's the highest form of flattery and the smartest thing you can do."
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"Concentration is the key to wealth. Diversification is the enemy of wealth."
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"When you find a business that can compound capital at high rates of return, you want to own it for decades."
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"The best way to minimize risk is to think."
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"If you're right 6 out of 10 times in investing, you'll do phenomenally well. You don't need to be right all the time."
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"Great investments are made when the future looks darkest and everyone is running for the exits."
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"A moat that gets wider over time is the holy grail of investing."
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"The stock market is a voting machine in the short run, but it's a weighing machine in the long run."
Written Works
The Dhandho Investor: The Low-Risk Value Method to High Returns
Pabrai's flagship book explains his investment philosophy through the lens of the Gujarati business community's approach to entrepreneurship. "Dhandho" means "endeavors that create wealth" in Gujarati, and Pabrai shows how traditional Indian business principles can be applied to stock market investing. The book emphasizes buying stocks with limited downside and significant upside potential, using case studies from his own portfolio and examples from successful entrepreneurs.
Mosaic: Perspectives on Investing
This collection of essays and speeches covers various aspects of Pabrai's investment philosophy and personal journey. The book includes his thoughts on value investing principles, the importance of learning from mistakes, and insights gained from studying great investors. It also covers his philanthropic work and how his Indian heritage influences his investment approach.
Pabrai Investment Funds Annual Letters
Pabrai's annual letters to his fund investors are considered among the best in the hedge fund industry for their educational value and transparency. These letters provide detailed analysis of portfolio performance, explain his investment rationale for specific positions, and offer candid discussions of mistakes and lessons learned. His letters often include book recommendations and insights from his meetings with other successful investors.
"The Spawning of Fundsmith" and Other Investment Case Studies
Pabrai has written detailed case studies analyzing specific investments, both successful and unsuccessful ones. These studies demonstrate his analytical process, show how he values businesses, and explain his decision-making framework. His case studies on Horsehead Holdings and Stewart Enterprises have become teaching tools in business schools.