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A listener asks...

1. Mohnish Pabrai is about as close to mimicking the Buffett partnership as there is out there right now. What are your thoughts on his recent change in approach to diversification? I understand that he's still remaining concentrated, but he has made a fairly drastic change from just a year or two ago.

2. The second question has to do with top down analysis. Buffett and Lynch are famously not interested in top down analysis, however those that famously called the current crisis (Grantham, Fred Hickey and the like) basically did it on a top down basis, and of course it has me thinking that one of the first questions has to be, "how invested should you be in the first place"? I think you somewhat agree with this, particularly in light of the work that you did on long term normalized earnings of the market, and normalized profit margins, but how do you marry that with Buffett/Lynch's views on limited value of macro analysis?

I answer...