Hello friends, Today I would like to tell you rules of investment by Mr Mohnish Pabrai.
An investment in knowledge pays the best interest.
RULE 1 : INDIA IS A FULL OF OPPORTUNITIES
Mr. Mohnish Pabrai says that India is full of investment opportunities.In India about 6000 plus companies are publicly listed company and tracking these companies are not possible for analyst.
That's why under value stock opportunities are more in India.
RULE 2: IT IS BETTER TO BUY A GROWING COMPANY OVER CHEAP NO GROWING COMPANY
If you buying stocks of not growing company and who's future growth prospectus is also not good and your buying this company at low cost. Then your actual profit will be the difference of company's actual valuation and market valuation.
When you buy growing company at good valuation then opportunities of return are good.
Buying growing company over not growing company is definitely a good investment.
RULE 3: IT IS A WAST OF TIME LOOKING FOR ANYTHING OTHER THAN MULTI-BAGGERS
Mr. Pabrai says thousand of stocks are listed on stock exchange. Our work is to sit for long time wait do nothing and when you get a good miss prize opportunity then keep it and relax, multi bagger opportunity we don't get everyday but when you get it don't leave it.
RULE 4: CONCENTRATE ON INDIVIDUAL COMPANIES.DON'T PAY MUCH ATTENTION TO THE MARKET
Mr. Pabrai says returns are depends on company's long term growth. Returns are not depends on the market if it go higher or low.
Just focus on what company doing work on it's growth or not.
RULE 5: DON'T SELL WHEN YOU GET GOOD RETURNS, SELL WHEN THE FUNDAMENTALS OF THE BUSINESS ARE DETERIORATING
When Mohnish Pabrai start investing then use to sell his stocks when he is getting good returns, but he realize that after selling his stocks the valuation of that stocks are more.
So don't sell when you get good returns sell when the fundamentals of the business are deteriorating.
Invest in yourself. Your career is the engine of your wealth.
