Rule #1 Finance Blog

With Investor Phil Town

InvestED: Ep. 174-Investing Perspectives of Mohnish Pabrai (Part 3)

Join us this week as we talk more of investing perspectives from the greats. We’ll continue talking about Mohnish Pabrai’s investing strategies, and we’ll discuss how everyone can benefit from the principles that great investors follow. Danielle gives us the gift of a few quotes that shed light on the importance of Rule #1-style investing.

In Episode 174 You’ll Learn

Characteristics of great investors:

  1. Research:
    • It is vital to know everything you can about a company. Doing the research is the only way to truly understand what you are buying.
    • Research should including letters, reports, and first-hand experience.
    • By becoming educated in the company you are buying, you can foster confidence in your purchase.
  2. Investing with confidence:
    • “Price is what you pay, value is what you get.” -Warren Buffett
    • Beware of confirmation bias and institutional imperative
  3. Confirmation Bias:
    • Finding a company that seems like a great investment and choosing to overlook potential red flags in their zealousness.
  4. Institutional Imperative:
    • The intense, competitive desire to outdo the peer group; i.e. doing well simply for the sake of doing well
    • Pabrai and others recommend relying on one’s own research when buying companies so that one can invest with confidence.

Links from this episode:

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On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week.