The Dhandho Investor: The Low-Risk Value Method to High Returns
Staff Reviews
This is one of my all-time favorite investing books. The author is an investor who was featured in the book The Checklist Manifesto. The book is focused on investing in the stock market, but most of the lessons and examples in the book can be applied to investing in any business opportunity (like buying a bookstore). The advice is straightforward, starting with the idea "heads I win, tails I don't lose much," and expanding from there. No complex math or fancy concepts here, and it is a great introduction to value investing.
There are lots of interesting stories in the book to convey the author's ideas: how the US hotel business was impacted by events in Uganda in the early 70s; how an unsolicited business plan on a music executive's desk let to the formation of a new airline; how an MIT professor figured out how to beat the odds at blackjack, got banned from the mob-run Nevada casinos, and then formed a massively successful hedge fund.
Recommended by Rob.
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.
