Mohnish Pabrai – “In investing, one should look for situations where you get the combination of very low risk and very high uncertainty. When you when you see an example of the two together the odds are very high that you can make a lot of money.”
Fans of Warren Buffett and Charlie Munger usually know the story about See’s Candies, the delicious chocolate company Berkshire Hathaway bought and now advertise shamelessly at their AGMs. Superfans usually also know about Blue Chip Stamps… But the details are often forgotten, including some of early Berkshire’s mistakes diversifying into things like department stores.
Thankfully, Mohnish Pabrai put together a thoughtful talk a few years ago at the University of California’s business school. It is a great reminder of the importance of making big bets when the odds are really in your favor, and how far a few bets can take you. Well worth a watch!