The Dhandho Investor: The Low-Risk Value Method to High Returns by Mohnish PabraiMy rating: 3 of 5 stars
This is a good book on investing fundas in the equity markets from a very well known name in the American capital markets. I had first come across the author's name when he became famous in 2007 for buying dinner with Warren Buffett along with his partner at Buffett's annual charity auction. Enamoured more about this event than by the author, I had written an amateur piece on value investing on my blog (my link text). So when I came across this book written by Mohnish Pabrai, I just couldn't resist myself.
The author is a self-confessed fan of Warren Buffett and Charlie Munger and needless to say there are few innovative original ideas in the book. But the whole idea of value investing was propounded by Benjamin Graham in his book "The Intelligent Investor" which is considered to be the bible of every value investor and popularised by Buffett. The author has lifted examples, quotes and anecdotes from Buffett's life. In fact, his fund Pabrai Funds itself is structured similar to Berkshire Hathaway, as revealed by him.
Coming to the core of the book, this is totally based on American capital markets. The analogy of the Patel community given by the author is interesting but for an Indian it is not at all new. The title contains the word "Dhandho". Any Indian reader would more or less expect some advice in the context of Indian stock markets (ok, so this is about value investing...still !) but there is no reference at all to any other emerging market except the US of A. Also almost a whole chapter is dedicated to financial websites for the American investor which can be useful titbit for investment tips. I wish the author had done some more research in the context of Indian capital markets. It is a tad disappointing when the reference point are the Patels.
Readers are expected to have a basic knowledge of equity markets and financial jargons like present value of future cash flows, intrinsic value, earnings per share etc. Then it becomes enjoyable, especially for the American reader.
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