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We Study Billionaires
Episode overview

TIP812: Mohnish Pabrai: Berkshire & Letting Winners Run w/ Mohnish Pabrai

We Study Billionaires · 5 Egleze moments
TIP812: Mohnish Pabrai: Berkshire & Letting Winners Run w/ Mohnish Pabrai ▶
Episode summary

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5 moments from this episode

Source-linked · editorially selected
01
Money

Greg Abel Better Than Warren Buffett in Important Ways Says Charlie Munger

Mohnish Pabrai reveals that Charlie Munger believed Greg Abel surpasses Warren Buffett in certain key areas. Abel has assembled a 30-person team between himself and Berkshire's operating businesses, creating a more hands-on management structure that addresses the historical undermanagement of Berkshire subsidiaries. This strategic approach could lead to tighter operations and better decision-making on manager performance.

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02
Money

Warren Buffett Admits Only 12 Ideas Created Berkshire's Value Over 58 Years

Buffett acknowledged that just 12 investment ideas over nearly six decades were responsible for Berkshire's success, representing only a 3-4% hit rate among 300-400 total investments. This mirrors broader market data showing approximately 4% of US businesses delivered all market returns over 90 years. The revelation underscores the importance of holding winners rather than frequent trading.

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03
Money

Greg Abel's 25 Million Dollar Compensation Called Serious Underpayment by Investor

Mohnish Pabrai argues that Greg Abel's $25 million annual compensation is far below market value, noting other Fortune 10 CEOs like Sundar Pichai earn over $500 million. With Abel's net worth between $700 million and $1 billion primarily from his Berkshire Hathaway Energy stake, he voluntarily invests his after-tax salary in Berkshire stock, demonstrating alignment with shareholders despite being able to command multiples elsewhere.

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04
Money

Charlie Munger Bought Coal Stock Six Days Before His Death at 99

Charlie Munger continued actively investing until his final days, purchasing Alpha Metallurgical Resources stock just six days before his death at age 99. After Pabrai recommended switching from Consol Energy to Alpha, Munger studied the analysis and made the switch, demonstrating his lifelong enthusiasm for investing regardless of life expectancy. The coal investment was made despite the sector being widely shunned.

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05
Money

Investor's Frontline Mistake Cost Him 200X Returns After Quick Double

Mohnish Pabrai sold Frontline after doubling his money in 2002, only to watch it appreciate 200 times more. Years later, fate brought him to Frontline's ornate Norwegian headquarters where he saw physical replicas of the VLCC ships that generated those massive returns. The experience reinforced a critical lesson about holding great companies even when fairly valued, as trimming winners too early is one of the biggest mistakes investors make.

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