THE DHANDHO INVESTOR (BY MOHNISH PABRAI)

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One of India’s best (if not the best) value investors, Mohnish Pabrai, shares his best advice for how to achieve a low-risk, high-return asymmetry investing in the markets in this book: The Dhandho Investor. This video is my interpretation on my favorite takeaways from the book.

Playlist of more advanced stock market concepts: http://bit.ly/2QOANKP

Top 5 takeaways from Mohnish Pabrai’s The Dhandho Investor:
0:00 Intro
00:45 1. The Dhandho framework
04:46 2. Investing is all about the odds
08:00 3. DCF analysis
10:44 4. Look for low-risk, high-uncertainty businesses
12:49 5. The art of selling

TL;DW:

Follow the Dhandho framework
Size your bets using odds and the Kelly formula, or a predetermined fraction of Kelly
Calculate the underlying value of a business using a DCF-analysis
Look for investments with a wide range of possible outcomes. People are generally afraid of making such investments, which results in lower prices than warranted.
Allow your investments sufficient time to reach their intrinsic value but realize that there’s also a cost of waiting. Sometimes, you have to admit that your wrong and take a loss.

My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.