Enterprising Investor Forum

The Dhandho Investor, M. Pabrai Friday, August 24, 2007

Monish Pabrai reviews the value investing approach, explains how it has served him and takes it one step further by detailing the Dhandho method (pronounced dhun-doe). He follows in the footsteps of Warren Buffett and really offers the reader a unique insight in how he invests, what reference material he uses and how he is guided by maximizing rewards AND minimizing risk. As he says, you need to make sure that you only toss a coin when the odds are: “Heads, I win; tails, I don’t lose much!”

This book is an extremely easy read and is real gem! 100,000 USD invested with Pabrai in 1999 would have been worth well over 650,000 USD in 2006 – that’s an annualized return of over 28% after fees and expenses! What we really liked is that he did not start his career on the Street and is not a classic money manager. He was an independent investor that slowly and surely moved towards value investing and eventually started to manage his own hedge fund.

The book explains how the Dhandho way of investing – basically, the way a certain ethnic India group approaches life and business – can be applied to the stock market and to the value investing framework. Furthermore, what is truly exceptional is the Monish Pabrai opens up the doors of his world for the reader and offers them a unique insight on how he has successfully managed to make investing his trade.

Enjoy!