Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (22) | Ignore Thread Prev | Next
Author: PebbledShore Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41316  
Subject: Re: The Dhandho Investor Date: 5/10/2007 1:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 5
Don't sell for at least 2 years regardless of what happens?

I don't recall Pabrai saying this, but maybe I am wrong. I think what he says in the book is hold for 2-3 years if nothing has fundamentally changed your thesis. Isn't that value investing 101? If you buy a 50-cent dollar and it takes three years for someone to buy that dollar from you for a dollar, then it's worth the wait for the annualized 26% return. Of course he says it usually takes about 18 months for the market to recognize his valuation. A 100% return in 18 months is 59% annualized.

And with the USAP example, why on earth wouldn't you buy more when it fell to $5, as opposed to waiting until it got back to $15?

Did he say he bought more when it came back up to $15? I don't recall that he did say that in the book, but again I could be wrong. Why not buy more when it went to $5? Not enough cash? Everything else was firing on all cylinders? Ah, hindsight is a wonderful thing, isn't it?

So I don't think he has a good selling philosophy.

Hindsight again. "Leaving money on the table" is totally irrelevant if you can consistently buy 50-cent dollars and sell them back to the market in 18 months for a dollar each.

As Pabrai Funds continues to grow--now upwards of half a billion--it will be interesting to see his thinking change and his ability to steer a large ship.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (22) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement