Mohnish Pabrai is one of the great investors settled in America, who was born in India. He started his investment career in 1994 and started a hedge fund, Pabrai Investment Funds in 1999. He is inspired by Warren Buffett's principles and strongly believes in value investing. Infact, he bid a whopping 650k dollars just for a charity dinner with Warren Buffett in 2007. He is managing more than 500 million dollars worth assets as of today.
Mohnish Pabrai is also known for his book Dhandho Investor. We always make up a equation that higher the risk, higher the rewards and lower the risk, lower the rewards. He in this book explains how can one achieve high rewards with low risk methods. He calls this a "Dhandho" style. Dhandho is a gujarati word meaning endeavours that create wealth. Gujaratis and Marwaris are so good at their business. Mohnish in his book explains about Patels who migrated to America in 1970s and became rags to riches. Patels in America bought the most beaten motels during 1970s at very cheap prices. They didn't have money so they borrowed money from banks. One would consider this as a risky bet but Patels were smart. They used rooms in motels for their own living and didn't hire any staff on work. The family members only worked in the motel. This brought their expenses to bare minimum and room prices were very attractive for customers. Because of this low cost model, they got successful at this venture and today more than 50% of motels are owned by Patels in America. Mohnish says if they had failed in their venture, they had nothing much to lose. The banks anyway had to lend money as the Motels that were mortgages had lost most of the value. Mohnish in his book has explained many other real life examples on how one can be successful with a low risk, high reward model. He calls this "Heads you win, tails you don't lose much" approach.
You might be wondering, what a car plate number has to do with investing? Can you decode this car plate number? There is a secret hidden message. This is Mohnish Pabrai's car plate number. Whenever he looks at his car plate number, it reminds him of his goal i.e. "Com-pound 26". His goal is to compound money annually at a rate of 26%. This doubles the money in just 3 years. In next 3 years his money will double again i.e 4 times of his initial investment. With this power of compounding in 30 years(3 * 10), the money will be 2 to power 10 i.e 1024 times (~1000). His financial goal is to make his money 1000 times in 30 years.
Mohnish is also a philanthropist. He started Dakshana Foundation with his wife in 2005. Mohnish believes that most powerful weapon that can alleviate poverty is Education. In Dakshana, they prepare candidates for 1-2 years for clearing engineering and medical entrance exams and get them into IIT and government medical colleges. They are currently in 7 locations in India and headquartered in Pune, Maharashtra. If you want to donate for someone's education, visit www.dakshana.org.
Thank You.
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