Mohnish Pabrai

Who

Mohnish Pabrai was born in Mumbai in 1964 and studied engineering at Clemson University in the United States. After working at Tellabs, he founded an IT consulting firm, TransTech, in 1991, funded largely from his retirement savings and credit cards. He sold it in 2000. In 1999 he started Pabrai Investment Funds, openly modeled on Warren Buffett’s early partnerships. He wrote Mosaic and The Dhandho Investor, and with his wife founded the Dakshana Foundation, which helps gifted students from poor families in India prepare for competitive entrance exams.

Operating rules

Clone shamelessly. He says plainly that his best ideas are borrowed, mostly from Buffett and Munger. The work is understanding why a proven approach works, then applying it with discipline. Originality has no value in itself.

Heads I win, tails I don’t lose much. His Dhandho approach looks for bets where the downside is small and survivable and the upside is large. He illustrates it with Indian immigrant families who built motel businesses in America with little capital and limited risk.

Few bets, big bets, infrequent bets. He keeps a concentrated portfolio and spends most of his time waiting. Action is rare, and when it comes it is decisive.

Run the checklist. Inspired by how pilots and surgeons use checklists, he keeps a written list built from his own mistakes and those of other investors, and goes through it before buying.

What I borrowed

The checklist. Memory is not a control. Before a decision that is hard to undo, I read a short written list of how similar decisions have gone wrong, alongside my pre-mortem. His cloning habit is also part of why I study role models every week.

What I won’t copy

His concentration. A few large positions suit a full-time professional who knows each one deeply. My barbell keeps most of my money in broad index funds, with only a small satellite for concentrated ideas.