Mohnish Pabrai

1. Everyone knows the duo of Warren and Charlie. But there was a third member in their group early on, Rick Guerin. Why don’t we know him, and where is he now? Turns out, he was highly levered, and in 1973-74, the drawdown forced him to sell most of his positions, including his position in Berkshire to Warren. He’s no doubt a great investor, but there was no need to use leverage. 

2. From 1965 to 1982, the Dow Jones was flat. From 1982 to 1999, it exploded. Then again, from 1999 to 2012, flat. 

3. Nifty 50 in the US. Slightly different to the Indian Nifty 50, with equal weightage of 2% in all 50 companies. Walmart was one of those 50. If you take the entire Nifty 50 and put the other 49 companies to 0, with only Walmart, it still beats the S&P. And this was assuming the likes of Coca Cola, P&G, Mcdonalds going to 0! All you need is patience. 

4. Charlie Munger: In life, you don’t get many trips to the Pie Counter. But when you do, you have to load up as much as you can (capital allocation).

5. Cloning - Microsoft

   1. Everything that has worked in Microsoft has been cloned. They've spent billions in R&D which for the most part has yielded them nothing. Word came from Word Perfect, Excel came from Lotus, Windows came from Apple.

6. Selling something because you think it's overvalued is one of the dumbest things you can do.

   1. Pabrai invested in Fiat Chrysler in 2012 at a $5-6bn market cap. Within this was 80% of Ferrari, which today has a market cap of $90bn.

7. On Growth vs. Value investing - All investing is value investing. Nvidia can be both a value investment or a growth investment depending on the price you buy it at. Warren himself bought Apple in mid 2000s, and at that time it was more of a growth investment. At the end of the day, one needs to look at the sum of future cash flows discounted back at today's price.

8. Story on Compounding - In 1625, a man named Peter Minuit bought the island of Manhattan for $24. To the layman, it might seem like the Native Americans were scammed and that he bought it for a huge bargain. But was this truly the case? Let's assume that the Native Americans had a semi-competent capital allocator who could grow their $24 by 7% annually. By the rule of 72, this means that money doubles every 10 years. So every 100 years, their $24 grows by 1000x. By now, they would've had $24 trillion!

9. There are 3 variables to compounding: Initial capital, rate of return and time. Everyone tries to optimize the first 2. But it is near impossible. Instead, we need optimize the runway for our investments, and let compounding work its magic.