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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
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Rangeley Capital Best Investment Ideas
  • "Heads, I Win; Tails, I Don't Lose Much" 4 comments
    Mar 5, 2013 1:15 PM

    A Conversation with investor and philanthropist Mohnish Pabrai on The Dhandho Investor.

    Chris DeMuth Jr:

    Anything that you would add if it were published today?

    Mohnish Pabrai:

    The section and discussion on Kelly Formula is flawed. Kelly only applies to making a zillion repetitive bets with similar odds (e.g. 500 coin tosses etc.). It cannot be applied to one-off investments. So I would take that out entirely. I would add many things if there were a 2nd edition. For example: checklists, error rates, detailed discussion on mistakes, a chapter on compounding etc. And as I got going there would be more. But no plans for such an edition/book.

    Chris DeMuth Jr:

    Are there any investments that you would make today as a result of this book?

    Mohnish Pabrai:

    The book is timeless. Those principles are applied all the time by me. It's like breathing. Pretty much any investment I have made or might make uses the core Dhandho framework discussed in the book.

    Chris DeMuth Jr:

    Anyone interested in learning more about how to apply the Kelly Formula might like Fortune's Formula. If you want further reading on checklists, you might consider The Checklist Manifesto. Most importantly, readers might consider buying a box of The Dhandho Investor copies based on the lack of plans for a second edition. Mohnish is in the same tier as Seth Klarman and his book could be the next Margin of Safety in terms of its content as well as its potential to appreciate.

    The future of value investing is in safe hands.

    Themes: Pabrai, Dhandho
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  •  
    Interesting remark about buying a case. One of my many sidelines is trading books. Of late I have been buying certain volumes with an eye toward what will be valuable in 25 years. Mostly I focus on childrens books with particular artists. I had one case that I likely sold too soon that got 1000% return in under 4 years. Others are probably dead money. Thanks to you I will probably have to lay in a supply of Dhando and preserve them!

    BTW, the Checklist Manifesto is a terrific book.
    Thanks for the review Chris, always enjoy them. Nice day for GKK!
    5 Mar, 04:25 PM Reply Like
  •  
    Thank you. So far so good.
    5 Mar, 04:26 PM Reply Like
  •  
    I just finished the Dhandho Investor... I loved the book!! After reading it when I invest explicit make the question: "it's a bet where the odds are on my side?"
    6 Mar, 05:36 AM Reply Like
  •  
    I am so glad that you liked it and I couldn't agree more.
    6 Mar, 06:03 AM Reply Like
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