Hello. I am Deepak Kundu, an avid book reader and quotes collector. As a hobby, I collect interesting quotes from the books that I read.
This post is a collection of 9 quotes from the book - The Dhandho Investor by Mohnish Pabrai. I hope you find these quotes useful.
The Dhandho Investor Quotes
Investing is just like gambling. It’s all about the odds. Looking out for mispriced betting opportunities and betting heavily when the odds are overwhelmingly in your favor is the ticket to wealth.
Most of the top-ranked business schools around the world do not understand the fundamentals of margin of safety or Dhandho. For them, low risk and low returns go together as do high risk and high returns. Over a lifetime, we all encounter scores of low-risk, high-return bets. They exist in all facets of life. Business schools should be educating their students on how to seek out and exploit these opportunities.
Wall Street sometimes gets confused between risk and uncertainty, and you can profit handsomely from that confusion. The Street just hates uncertainty, and it demonstrates that hate by collapsing the quoted stock price of the underlying business.
Innovation is a crapshoot, but investing in businesses that are simply good copycats and adopting innovations created elsewhere rules the world.
Having a moat that your competitors can see in broad daylight but never ever cross is just fantastic—and a rarity.
In seeking to make investments in the public equity markets, ignore the innovators. Always seek out businesses run by people who have demonstrated their ability to repeatedly lift and scale. It is the Dhandho way.
The key to being a successful investor is to buy assets consistently below what they are worth and to fixate on absolutely minimizing permanent realized losses.
While it is always best to learn vicariously from the mistakes of others, the lessons that really stick are ones we’ve stumbled though ourselves.
We cannot change the world, but we can improve this world for one person, ten people, a hundred people, and maybe even a few thousand people.