The Dhandho Investor - Mohnish Pabrai book review

'The Dhandho Investor' is really all the wisdom of renowned investor, Warren Buffet, dumbed down to make it understandable to the lay investor.

Mohnish Pabrai begins his book by saying, "I have very few original ideas.Virtually everything has been lifted from somewhere." This couldn't be more true.

Mohnish Pabrai applies the Buffet theories to the 'Patel' way of doing business. The Patels are the Gujarati NRIs who've made billions in the motel business in America. The Patel community bought real estate in the early 1970s when it was available at throwaway prices, risking everything they had on it. They ran the motels with family labor, similar to the way families in Indian villages run their farms or the way business families in India's cities and towns run their businesses. Subsequent cash flows were ploughed back into business, trusting relatives to run them, creating large entities eventually. This in a nutshell, is what 'The Dhandho investor' is about.

Despite being of Indian origin, it comes as a surprise when he claims to have heard of the term 'Dhandho' from a roommate only much later, in college. 'Dhandha' is business in Hindi and is as common a word as any, used in everyday talk among the middle class business community.

Mohnish Pabrai talks of finding low risk, high uncertainity opportunities. 'Heads I win, tails I don't lose much' is repeated so many times in the book, one gets a little tired.

The book is typeset in a font, only slightly smaller than the typeface in fairy tale books for three-year-olds. If it had been edited well and printed in a decent font size, the book would have been a long article.

The later part of 'The Dhandho investor' is really only a shameless plug for Mohnish Pabrai's own private mutual fund modelled on the lines of Warren Buffet's fund. Mohnish Pabrai was recently in the news when he paid a large sum of money for a charity dinner with Warren Buffet.

While Pabrai's ideas are lifted, as he himself confesses, even some of his examples such as buying stocks of a company into the funeral business are straight lifts from other investment books.

To return to Warren Buffet, his books are addressed to the average stock picker but the sheer amount of information packed into some of them makes them intimidating for most beginners. Warren Buffet today is far more famous even as compared to his Guru, Benjamin Graham who's book 'The Intelligent Investor' is considered the Bible of stock investing. The budding stock investor would do well to read Benjamin Graham, Warren Buffet, Peter Lynch, Jim Rogers and other investors who have much more to say in their tightly written books. I would specially strongly recommend 'The Intelligent Investor' . 'The Dhandho Investor' can probably get your feet wet but nothing beyond that.