World Famous Comics: The Dhandho Investor: The Low - Risk Value Method to High Returns
The Dhandho Investor: The Low - Risk Value Method to High Returns
By: Mohnish Pabrai Publisher: Wiley Average Rating: Binding: Hardcover Label: Wiley Number of Items: 1 Number of Pages: 208 Publication Date: April 06, 2007
Product Description: A comprehensive value investing framework for the individual investor
In a straightforward and accessible manner, The Dhandho Investor lays out the powerful framework of value investing. Written with the intelligent individual investor in mind, this comprehensive guide distills the Dhandho capital allocation framework of the business savvy Patels from India and presents how they can be applied successfully to the stock market. The Dhandho method expands on the groundbreaking principles of value investing expounded by Benjamin Graham, Warren Buffett, and Charlie Munger. Readers will be introduced to important value investing concepts such as "Heads, I win! Tails, I don't lose that much!," "Few Bets, Big Bets, Infrequent Bets," Abhimanyu's dilemma, and a detailed treatise on using the Kelly Formula to invest in undervalued stocks. Using a light, entertaining style, Pabrai lays out the Dhandho framework in an easy-to-use format. Any investor who adopts the framework is bound to improve on results and soundly beat the markets and most professionals.
Good read I read 2 Kiyosaki books before this one so it was a good change of pace. He provided a lot of examples but but I wish there was a little more "how-to". Overall a good read.
A Great Book but... This was a great book by someone who had great market results. He clearly states his objectives and how to do it. he gives great examples so we can follow his footsteps. However he used to have amazing returns (even better ROI than Warren Buffet). But since I got the book, almost 2 years ago, he has not been doing well at all in his fund. So I am not sure yet that his system works in the longer term. Right now he is way down this year.
Save your time and money I am not trying to hate on this book - I saw a review of this on CNBC and they selected one passage and I was really intrigued by the idea of "heads i win, tails i dont lose much" (by the way, the book repeats this north of 20-30+ times and I got extremely sick of this as I went half-way through the book) and decided to read this on my own time. I have always found a lot of credibility in analysis driven by limited downside risk or "value" investing in the sense of investing at close to book value or when the probability of success is high given entry cost is low.
However, I could not help but loathe Pabrai's seemingly infatuated mindset with Buffett. This book is essentially 1) very rudimentary cash flow and financial background (if one can even call a few tables of numbers cash flow analysis), 2) half of the book is a ra-hash of either direct quotes from Buffett or how difficult Pabrai finds to mask his vague attempt to almost equate his investing style to that of Buffett's, and 3) largely a promotion of Indian-Hindu concepts as they relate to very prevalent and hardly insightful financial concepts.
I would not recommend anyone read this book. I usually don't leave reviews and this is the first one I have done - I promptly threw the book out after I read it that's how much I could not stand wasting 2-3 hours reading this guy's writing.
trite, simplistic analysis written for a sixth grader An easy read but essentially trivial. A hotelier example and a few other vignettes are used to make the case that there's a free lunch (no risk, high reward). As if it was that easy. Actually the hotelier example (investing a couple of million in a hotel in the middle of the So Cal desert, after 9/11, that just happened to work out) makes the case there is no free lunch. A better book is by Dreman, on contrarian investments, or "Fortune's Formula" by Poundstone, if you're into this thesis of a free lunch.
Avoid this book like the plague.
Decent, not original..... The Dhandho Investor was recommended by a colleague who knew of my interest in money management and I had fairly high expectations. The book provides a decent introduction to value investing by applying simple valuation techniques to a variety of situations. It also provides resources to get you started as a value investor.
However, I found the first 5 chapters on Dhandho concepts superfluous. In fact, the Dhandho concepts and the examples from Hindu mythology were more distracting than illuminating, notwithstanding some entertainment. The Dhandho concept itself, explained as an original or unique style of business principle followed by Indian immigrants, is vacuous. The idea of starting and running a family business as the low-cost producer (through very low overheads) with borrowed money is not limited to "Patels" but has been known and practised by many immigrant communities across the US - Korean grocers, Chinese laundromats, and Vietnamese doughnut shops, to name a few. It is not the idea that is valuable, but the adoption and execution of the risks as few people are willing to live a life of penury exemplified by immigrant entrepreneurs. I would also add that I find the "lattice theory" overdone in general in the investing world lately. The concluding pages of the book urged the reader to improve the world through charity and altruism, a reference I found both irrelevant and condescending.
Still the value investing concepts of Graham, Buffett, and Munger, are very well illustrated and one gets a good insight into a successful value investor's mind. I found the thread of the story an interesting one particularly with Mr Pabrai's development into a value investor after being a successful entrepreneur early in his career.
Overall, I would recommend this book with the above caveats, but would urge that you read Benjamin Graham's books first.
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