Mohnish Pabrai: How to earn a 25% return per year (six investing rules)

Mohnish Pabrai is an Indian-American businessman, investor, and philanthropist. He is also sometimes known as Indian Warren Buffet. In this video, he shares his six investing rules which have helped him generate a 25% CAGR for the last 18 years:

  • Rule 1 – Be a shameless cloner: copy the portfolio of successful investors whom you can trust

  • Rule 2 – Buy stocks with MOATs: Companies with an enduring competitive advantage earn better than average rate of return over an extended period

  • Rule 3 – You make money by waiting: Investing is 10% picking the right stock; 90% is patience

  • Rule 4 – Don’t engage in short selling: Trading or options

  • Rule 5 – Low risk, high uncertainty: Invest like entrepreneurs by minimizing risks while going after free lunches; focus on downside protection

  • Rule 6 - Have a checklist: Learnings from past mistakes to check the thoroughness of the analysis/investment thesis

Do see this video to understand more about the six investing rules

 


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