Ace investor Mohnish Pabrai attributes his investment knowledge to these 6 books

Mohnish Pabrai one of them. This Indian-American businessman and investor is the founder and Managing Partner of Pabrai Investments Funds while also managing Dhandho Funds. His book “The Dhandho Investor” is being read and endorsed in management schools teaching their students the value of taking low risk to get higher returns.

A comedian and copycat of Warren Buffett, Pabrai willingly shares the names of the books that not only educated him on the art of investing but also helped him hone his skills on when, where, and how his investing money for better results in the long run. run. The following is the list of books that Pabrai read to learn investing:

Devil’s Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger

This book is not your most boring and boring book investment books. Rather, this book is more like an author’s journey where the writer guides you through an exploration of the strategies, approaches and background of Charlie Munger, a figure often seen as the mastermind behind the famous investor Warren Buffett.

Janet Lowe, an investment author, compiled the book using insights gained from Munger, his family, and Buffett. The book explores the private life of a man known for his secrecy, tracing his journey through World War II, the loss of a son, and a medical procedure that resulted in partial blindness in one eye.

Deep Value Investing: Acquiring shares in a market with great potential

This book by Jeroen Bos provides an incredibly open and enlightening roadmap to the intricacies of deep value investing. Written by an experienced investor with a long and impressive track record, it offers unique insight into the techniques for identifying promising undervalued stocks ahead of the curve. Deep value investing is all about finding truly valuable companies that have the potential to deliver outstanding long-term returns.

This investment style represents a contrarian approach to investing that can yield significant rewards for those with patience and a long-term investment perspective. However, it is important to keep in mind that success is not guaranteed, and deep value investing can be emotionally challenging on certain occasions.

Common stock and uncommon profits and other writings

Philip Arthur Fisher, which few investors have achieved, imparts the wisdom of prudent investing in this book and creates a resilient, limitless investment philosophy that paves the way for a peaceful and financially secure future. Fisher’s investment approach can be distilled into a simple maxim: the targeted selection of exceptional companies with strong growth potential, and the acquisition and maintenance of them, over the long term.

Within the book, critical questions that investors should ponder when searching for high-potential growth opportunities are explored and systematically addressed.

100 to 1 on the stock market

This book serves as an examination of “100-baggers”, extracting valuable insights to reveal their shared characteristics and identify these opportunities in their youth. and investing in “compound machines”, which are ventures capable of delivering significant long-term returns. The author emphasizes the wisdom of acquiring quality companies at reasonable prices and holding them for an extended term.

Phelps’ strategy focuses on the principle of compound interest, where compounding interest upon interest leads to exponential growth. He argues that by investing in companies with high returns on invested capital (ROIC), investors can take advantage of the potential of compound interest to achieve significant wealth accumulation.

Excess Results: A comparative study of the methods of the world’s greatest investors

In Frederik Vanhaverbeke’s book, he breaks down the investment principles and strategies used by a cadre of the world’s most enduring investors, including luminaries such as Warren Buffett. Benjamin GrahamAnthony Bolton, Peter Lynch, Charles Munger, Joel Greenblatt, Seth Klarman, David Einhorn, Daniel Loeb, Lou Simpson, and Prem Watsa.

The book takes a fundamental position that market performance is possible and goes on to explore how these famous investors consistently achieved exceptional results, often by significant margins. Using close scrutiny, the author explores the content of dozens of books, articles, letters, and speeches given by dozens of leading investors over the past century, culminating in a comprehensive blueprint detailing the precise methods used by these investment legends. in their trade.

Vanhaverbeke argues that recurring principles are inherent in the investment strategies of these great investors. These principles include:

Emphasis on value: Successful investors look for companies whose market prices are significantly lower than their intrinsic value.

Expanded investment area: Victory comes to those investors who show patience and persistence in holding their holdings over the long term.

Methodological methodology: Effective investors adhere to a disciplined investment approach, guarding against emotional interference in their decision-making.

Against the Gods: The great story of risk

Peter L. Bernstein’s non-fiction work discusses the history and progress of risk management. Bernstein argues that risk is not a brand new concept but a timeless challenge that has faced humans for centuries. It traces the evolution of risk management from its origins in ancient civilizations to its contemporary applications in finance and insurance.

Given the continued boom in stock market performance, highly seasoned market analysts analyzing, and prompting revisions to their predictions, an examination of the concept of risk becomes particularly relevant. The author presents a comprehensive chronicle of humanity’s quest to understand risk and probability. This journey begins with ancient Greek gambling, expands through the contributions of 17th-century French mathematicians Pascal and Fermat, and enters the realms of modern chaos theory. Overall, Bernstein shows that an understanding of risk is the foundation for endeavors ranging from game theory to bridge building and winemaking.

This book offers an engaging and enlightening read that sheds light on the often misunderstood concept of risk. It remains a valuable resource for those seeking a deeper understanding of risk and its impact on our lives.

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Updated: 10 November 2023, 03:27 PM IST