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Mohnish talks about Prem & FFH, Munger & constructing a Portfolio


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Great read about Mohnish Pabrai. He talks about Prem & Fairfax, also on Munger & constructing a portfolio.




Mohnish Pabrai on Avoiding Commitment Bias, Fairfax and Constructing a Portfolio




<snip>...            In fact, I brought this up at a lunch I had with Charlie Munger in 2009. I said, "You know Charlie, I made this change in my portfolio where I've gone from ten percent to five percent." He stopped me. He didn't even let me finish. He said, "You know, you're going to ask me something which goes against all my natural tendencies. I'm a guy who likes to own three stocks in a portfolio and that's it. There's no need for a fourth stock."


I said, "Yeah, but let me finish my sentence." I explained to him how we had these big blow-ups with these things going to zero, etc. I said, "I'm not going to 100 stocks but maybe pushing it to 20 seems to be more effective." He then changed his mind. He said, "Well, if you look at Berkshire Hathaway (BRK.A)(BRK.B) and if you think of every holding as a stock, … if you think of See's Candy as a stock, Geico as a stock or even Coke as a stock …." He said, "You can look at our top 20 holdings, and by the time you get to the 20th holding, you'll get into about 75, 80 percent of capital."



read the full article at GuruFocus.com:




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