21 Secrets of Tax Advantaged Value Investing 4 of 4 Q and A

Master Your Money

Mohnish Pabrai explains why Warren Buffet avoids high tech companies because he seeks predictable business models. He also explains that Buffet and Munger understand that good investment ideas are rare. You are not going to have a river of good ideas because the world is a competitive place. It doesn’t make much sense to put your money in your 20th best idea. Mohnish maxes out at 10% of assets at cost. Sometimes the nature of the position warrants a smaller 2 or 5% bet. Mohnish agrees with Charlie and warren but very few investors have the abilities they do. Hence he believes most people should not have just 3 stocks as Munger does.