TIP347: Value Investing in 2021 w/ Mohnish Pabrai
The Investor's Podcast (We Study Billionaires) - The Investor’s Podcast Network
Stig Brodersen
4.6 • 3.6K Ratings
🗓️ 2 May 2021
⏱️ 65 minutes
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| 0:00.0 | You're listening to TIP. |
| 0:26.0 | With Mr. Manish Pupry. |
| 0:52.0 | Welcome to the Masters Podcast. I'm your host, Dick Broderson and today's guest, |
| 0:56.4 | Moniz Pupry needs no further introduction. |
| 0:59.0 | Let's jump right into it. I know that 2020 has been a year of learning for you. |
| 1:04.6 | Perhaps the biggest year of learning since 1994, which was the year where you picked up |
| 1:09.5 | one up on Wall Street by Peter Lynch in Heathrow Airport and through that learned about |
| 1:13.6 | Warren Buffett. Saying that 2020 was perhaps the biggest year of learning since then seems |
| 1:19.0 | like a toll order. What have you learned? |
| 1:22.2 | I used to have a license plate called CMLB26, compound 26. And my daughter took that plate |
| 1:30.5 | from me. So now that plate is on her whole car and I told her, you know, the plate comes |
| 1:36.1 | with a lot of responsibility. You have to be compounding at high rates if you're going |
| 1:41.6 | to keep that plate. So she's got some pressure on her. But the compound 26 really came from |
| 1:47.6 | the fact that when I first started investing in 94 and I first heard about Warren Buffett, |
| 1:53.7 | I thought, okay, you know, if you buy a company at half off, 50% off. And it converges to |
| 2:00.4 | fair value in two or three years. So 50 cents becomes a dollar. If it takes three years, |
| 2:07.8 | it would be just about exactly 26% a year because 1.26 Q is two. And if it took two years, |
| 2:14.6 | they'd be even better and we'd be close to 35%. And so I said, well, you know, this compounding |
| 2:20.5 | at 26% should be pretty easy because if you find a 50 cent dollar, three years is a long |
| 2:26.7 | time to get to convergence. And if it's a growth company and in the three years it grows, |
| 2:34.0 | then you can get even more than that. And of course, what I've discovered in the last |
| 2:38.4 | maybe 27, 28 years is it's not so simple because first of all, you have an error rate. So |
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