Thanks all for the well wishes. Everyone is doing great! Now, back to business as usual (with a hint of less sleep).

In 1939, Sir John Templeton borrowed money to buy stock in 104 companies selling under $1, 34 of which were in bankruptcy. In time, four of those stocks ended up worthless, but Templeton turned massive profits on the portfolio as a whole.

Should we be looking at small- and mid-cap stocks? Pabrai thinks so.

Continue Reading Pabrai's Law of Large Numbers ››

Some 50 years ago, John Larry Kelly came up with a formula to determine how much you should bet on a gamble or investment to optimize your bankroll. Now known as the Kelly Formula, the equation determines the optimal percentage of your cash to bet on a favorable bet.

Mohnish Pabrai talks about it. Pabrai applies it to some of Buffett's past purchases. I guess we should take a look at it too. Heck, in this game, it pays to be a copycat.

Continue Reading Pabrai Week: The Kelly Formula ››

Before we ever crammed into the conference hall for the meeting and Q&A session, Mohnish was chatting it up with investors and prospective investors (and fans) in the half hour meet-and-greet. I arrived 15 minutes early and the room was already half full (or half empty if you are a pessimist).

Continue Reading Mohnish: On Noise, Emotion, Gold And Change ››

I went to the Pabrai Funds annual meeting on Saturday, armed with some of your questions. It is often good to bounce ideas and questions off other business investors, and you can't argue this Buffett disciple's 30+% average annual return for the last eight years. Mohnish Pabrai—manager of a $600 million hedge fund, lunch guest of Warren Buffett, business investor, and generally nice (and accessible) guy.

Here's what he had to say.

Continue Reading Why Ask Me? Ask Mohnish. ››