Mohnish Pabrai: How Not To Leave So Much Money On The Table
Monday, May 5, 2025 · Johnny Hopkins
During his recent presentation at VALUExBRK 2025, Mohnish Pabrai reflected on past missteps, admitting, “Most of my investing career I had this screwed up framework.” For years, he sold too early—selling when stocks hit 90-95% of what he believed was intrinsic value. “So much money left on the table with that dumb approach,” he said. Why? “We don’t know what intrinsic value is—we think we do, but we really don’t.”
He now believes the best investors are actually entrepreneurs who never sell. “If the job is done right, the time to sell is never,” Pabrai said, quoting his friend Nick Sleep. That shift in mindset has led him to be comfortable with massive portfolio concentration: “In one of my funds, one position north of 60%… it’s undervalued so we’re not really interested in selling.”
Still, he acknowledges this can make clients nervous. His solution? “I’m not trimming. You should trim.” He advises clients with less than 20% of their net worth in the fund not to worry. But if that exposure makes up a larger portion of their assets, “they can redeem partially they can even redeem completely.”
Pabrai also shared a story about Charlie Munger that underscores his new philosophy. At their dinners, Munger would always talk about the same holdings: Berkshire, Li Lu, Costco, and apartment houses. “He knew that none of these needed to be sold,” Pabrai explained. “We are not going to find too many great things in our life and so when we do, we got to hold on.”
On cloning, Pabrai warned that the idea “has to be one of their top two or three picks.” And when you analyze it, “if it doesn’t hit you over the head with a 2×4 very quickly, move on.” As for behavioral bias? Cloning isn’t about blind copying. It’s about using others’ conviction as a filter—then doing your own work.
Pabrai also spoke to the power of avoiding leverage. The number one reason investments fail, he said, is debt. Citing both IKEA’s founder and Berkshire Hathaway’s approach, he explained: “You can’t take a 500-year view if you’re running a levered business.”
And what about valuation discipline? “I like to buy great things, but I’m not willing to pay up,” he said. “That can hurt and that can help, but I’m wired the way I’m wired.”
You can watch the entire VALUExBRK 2025 session here: