Mohnish Pabrai: Investing and the Art of Cloning

In a video talk to students of an MBA class, hedge-fund investors and Warren Buffett-disciples Mohnish Pabrai and Guy Spier share their considerable wisdom with University of California, Davis’s MBA Value Investing class on 22-Aug-2012:

If you set up an investment operation…like an operation I run…and instead of tearing your hair out…trying to find stocks to buy, what you should do is just look at what the great investors are buying.

You can then evaluate the ones that fall within your circle of competence and buy those. With a 120 IQ, you can set up an operation like this, just cloning the great investors. And I believe you will do quite well.

In fact, most of the picks that Pabrai funds has, have come from some other investor. I am a…shameless cloner. I have no problem…like Sam Walton had no problems taking ideas from other supermarkets…taking ideas from wherever I get them.

Cloning is a very powerful notion. No good books have been written on cloning yet. If you take what Buffett did, then you are already beating the S&P by 11.5% per year. Mostly what Pabrai Funds did was to copy the other investors. I just give a slight tweak to it. I don’t buy what others are buying. I look at what they are buying. Then I buy what I can understand and limit myself to two-three decisions a year.

Leave a Reply

Your email address will not be published. Required fields are marked *