Tag Archives: Pabrai

TIME OUT: Franchise Investing (Pat Dorsey)

Thanks to www.santangelsreview.com

Slides here:pat-dorsey-talks-at-google

A franchise-type company does not often become a distressed, deep value investment. But since we will next be discussing Buffett and his development from cigar-butt investing to buying See’s Candies, I thought a review of franchises by this money manager would interest you.

One mistake investors make is confusing an average company with a franchise. Not to pick on anyone but when Monish Pabrai said Pinnacle Airlines had a moat due to the type of aircraft the airline was flying or Excide Batteries had a brand, he thought he was investing in a franchise. Yes, Excide batteries may be well-known but it doesn’t change a consumer’s behavior.

M. Pabria Video Lecture at Ivey School Feb. 2012

Mohnish Pabria of Pabrai Funds discusses mental models and competitive analysis.  Don’t blindly follow or worship investing “gurus” but try to use what makes sense to YOU. Even investors like Pabrai have trouble understanding competitive advantage as shown by his investments in Exide (Xide), Pinnacle Airlines, Sub-prime credit during 2008, etc. We ALL make mistakes so we should learn from everyone around us.

Pabrai says, “I am a shameless cloner.” Copy good ideas.