Mohnish Pabrai

A subset of CEOs is that of entrepreneurs. And the classical definition of an entrepreneur is an individual who pursues opportunity without regard to the resources currently controlled. That sounds like a very different person than one might expect an analytical investment manager to be.

The only way one should buy stocks is if you understand the underlying business. You stay within the circle of competence. You buy businesses you understand.

Before starting my own investment funds, the only models I was aware of were those of Warren Buffett and Charlie Munger. Their models made a lot of sense to me, so I cloned them.

I used to not talk much to anyone about my investments.

Talking to people is beneficial if you can identify the right people to share ideas and discuss decisions because everyone has blind spots, and others can sometimes catch yours. I think an investment team is a bad idea, but it is a good idea to talk to trustworthy individuals who do not have biases or interests.

It is the performance of the business that matters. It is hard enough to figure out the future of the business. Do not try to figure out the future of the country or the world; focus on the business.

We have to do what I would call anomalies: we have to look for strange things that show up once in a while. They don't show up all the time. We have to be scanning the horizon, and doing that, once in a while something will show up that makes a lot of sense, and then you act on it.

The good thing about getting wealthy is we don't need to understand a lot of things!

One might think of investment managers as astronomers and CEOs as astronauts. The two roles are radically different with distinct personality traits. Like astronomers, investment managers tend to be introverted, skeptical, and very analytical. CEOs, like astronauts, are the exact opposite, typically being extroverts, optimists, and, well, leaders.

To the extent societal rules or the wiring of your brains make it easy to acquire a lot of assets, then to the extent you can, you should try to improve the world.

The essence of a good investment manager is one who studies a given business and extrapolates the future cash flows that the business is likely to generate over the next several years. Based on the cash flow and asset assessment, they can then arrive at their expected rate of return if they bought a fraction of that business at a given price.

When I ran a small IT services business in the 1990s, it had strong recurring revenues - yet I couldn't accurately forecast cash flow for even the next few quarters. Small changes in the customer base or losing/hiring a few key employees could create massive swings in cash flow.

One of the reasons why we can make a lot of money in equity markets is because they're auction-driven, and auction-driven markets are very different from almost any other kind of market.

I own a company called Rain Industries.

I think investors ought to focus on making sure that the stock is within their circle of competence, that it's worth a lot more than it's valued at - and once you have those two things, a stop-loss makes no sense.

The stock knows that I bought it, and it decides, 'Mohnish is done. Now let's go down.'

The government has to be flexible in Air India sale price, structure, and employee management plan.

One of the first things I tell people is, if you want to learn about investing, you want to open an account and make real investments because that's when it becomes real.

People see poverty all around them in India, but they are desensitized or immune to it. I came to the conclusion that poverty is driven by lack of education.

The problem most nonprofits have is that they are run by romantics who are great to hang out with, but they have no clue.

We Americans love original ideas. But truly, there are already plenty of good ones out there, ours for the taking. If I were too proud to copy the ideas of others, I likely wouldn't have even a fraction of my current success.

I think a lot of people are getting more serious about how to do the most good, but there is no road map. I'm hoping I can offer an example.

Industries with rapid change are the enemy of the investor. Tech businesses, particularly biotech, is a problem from that point of view. All industries work with change, but you should ideally be investing in businesses with a low rate of change, not a high rate of change.

The good news in investing is there are no HR problems. If there are no humans, there are no problems!

I have a hard time getting past the day without the nap, so the nap is a must.