The Dhandho Investor

Description

The Dhandho Investor by Mohnish Pabrai is a practical, accessible guide to value investing rooted in the principles of Warren Buffett and Charlie Munger. Drawing from the traditional Indian business philosophy of “Dhandho” (which means “endeavors that create wealth”), Pabrai outlines a low-risk, high-return investing strategy that emphasizes patience, simplicity, and discipline. Using real-world examples—such as the investment practices of the Patel motel owners in the U.S.—Pabrai explains how successful investors seek heads-I-win, tails-I-don’t-lose-much opportunities. He urges readers to focus on buying shares of undervalued companies with a high margin of safety, preferably in industries that are simple to understand, under temporary stress, or facing pessimism. Key principles from the book: Invest in existing businesses – Avoid startups; focus on businesses with proven track records. Buy businesses with durable moats – Competitive advantages help ensure long-term profitability. Invest in distressed industries or companies – Fear in the market often creates bargains. Bet big when the odds are strongly in your favor – But only when you have deep conviction. Always insist on a margin of safety – Buy at prices well below intrinsic value. Focus on intrinsic value, not market noise – Be driven by business fundamentals, not stock prices. Pabrai distills Buffett-style investing into a simplified, repeatable formula for everyday investors. His tone is practical and motivational, demystifying the world of investing and emphasizing the value of doing fewer things—but doing them right. In essence: The Dhandho Investor is a no-frills, wisdom-packed guide for investors who want to build wealth with minimum risk. It’s ideal for beginners and intermediate investors seeking to apply rational, time-tested strategies without getting caught up in Wall Street hype.