Mohnish Pabrai: Everyone Needs Someone To Talk To About Their Investments

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In this presentation and Q&A at MDI, Gurgaon, Mohnish Pabrai discusses the importance of having someone to talk to about your investments. Here’s an excerpt from the presentation:

Q2 2023 hedge fund letters, conferences and more

Mohnish Pabrai

Pabrai: Yeah, that’s a great question. I had a conversation a few years back with Charlie Munger, and he casually mentioned that he always has someone to talk to about his investments. I said, ‘Oh, you mean like Mr. Buffett?’ He said, ‘Well, it wasn’t always Warren, but I’ve always had someone to talk to.’

In fact recently he said that again at the Daily Journal meeting. He said that even Einstein needed someone to bounce ideas off of. Each human brain processes the same information differently, and to the extent that you can find someone who’s thoughtful, is not processing data similar to you, it would be useful to have those conversations.

But I think that’s different from having a team. If you have analysts under you and they report to you, then the incentives and dynamics of that exchange are very different from having a peer where there is no vested interest of any kind.

Two people having conversations about thoughts. So I never appreciated this. For most of the history of Pabrai Funds I operated making decisions on my own.

I have a good friend Guy Spier, and usually he and I will talk about things that either he’s looking at or I’m looking at. Many times we don’t agree, and many times I’ll buy things that he won’t buy, or he’ll buy things that I don’t buy, and so on.

So, if we look at our portfolios, they look very different from each other. But I have found it very useful to have these conversations because, actually, Guy runs a fund on his own.

Neither of us has any economic interest in the other fund because we don’t gain or lose anything by what happens.

I am confident that he’s confident that we are candidly sharing our beliefs and perspectives, and that’s useful.

You can watch the entire discussion here:

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Tobias Carlisle is the founder of The Acquirer’s Multiple®. He is also the founder of Acquirers Funds®. The Acquirer’s Multiple® is the valuation ratio used to find attractive takeover candidates.