The Dhandho Investor: The Low-Risk Value Method to High Returns

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.

Introduction:

All investors are told that if you want to earn high rates of returns, you must take on greater risk. Of course, the groundbreaking value investing strategies of Benjamin Graham, Warren Buffett, and Charlie Munger have shown that it is indeed possible to keep risk to a minimum while still making a reasonable profit. The Dhandho method takes their successful approach to investing one step further and shows how you can actually maximize rewards while minimizing risk.

Dhandho (pronounced dhun-doe), literally translated, means “endeavors that create wealth.” In The Dhandho Investor, Mohnish Pabrai demonstrates how the powerful Dhandho capital allocation framework of India’s business-savvy Patels can be successfully applied and replicated by individual value investors in the stock market. The Patels, a small ethnic group from India, first began arriving in the United States in the 1970s as refugees with little education or capital. Today, they own over $40 billion in motel assets in the United States, pay over $725 million a year in taxes, and employ nearly a million people. How did this small, impoverished group come out of nowhere and end up accumulating such vast resources? The answer lies in their low-risk, high-return approach to business: Dhandho. This book will show you how to use that same technique to generate high returns in the stock market.

Pabrai’s hedge funds, Pabrai Investment Funds, have outperformed all of the major indices and over 99% of other managed funds. $100,000 invested with Pabrai in 1999 was worth over $659,000 by 2006 an annualized return of over 28% after all fees and expenses. In this book, Pabrai distills the methods of Buffett, Graham, and Munger into a user-friendly approach applicable to individual investors. Combining their legendary investing wisdom with the business acumen of the Patels, Pabrai lays out the Dhandho framework in an easy-to-use format that will help any investor significantly improve on their results and soundly beat the markets as well as most professionals.

Pabrai also details each deceptively simple Dhandho concept in a straightforward, entertaining fashion, with individual chapters that explain why you should: Invest in Simple Businesses, Fixate on Arbitrage, Invest in the Copy Cats Rather than the Innovators, and other simple but proven concepts for low-risk, high-reward Dhandho investing.

Contents:

• Patel Motel Dhandho
• Manilal Dhandho
• Virgin Dhandho
• Mittal Dhandho
• The Dhandho Framework
• Dhandho 101: Invest in Existing Businesses
• Dhandho 102: Invest in Simple Businesses
• Dhandho 201: Invest in Distressed Businesses in Distressed Industries
• Dhandho 202: Invest in Businesses with Durable Moats
• Dhandho 301: Few Bets, Big Bets, Infrequent Bets
• Dhandho 302: Fixate on Arbitrage
• Dhandho 401: Margin of Safety—Always!
• Dhandho 402: Invest in Low-Risk, High-Uncertainty Businesses
• Dhandho 403: Invest in the Copycats rather than the Innovators
• Abhimanyu’s Dilemma—The Art of Selling
• To Index or Not to Index—That Is the Question
• Arjuna’s Focus: Investing Lessons from a Great Warrior

The Dhandho Investor: The Low-Risk Value Method to High Returns By Mohnish Pabrai pdf