The Dhandho Investor, by Mohnish Pabrai provides you with “The Low-Risk Value Method to High Returns.”
And while you may not have heard of Mohnish Pabrai, Pabrai Funds, or The Dhandho Investor, this is a value investing book you won’t want to miss. And the reason is…
Mohnish Pabrai is a very successful value investor who has attained massive returns through relatively simple methods. It’s almost unbelievable how easy he makes investing look. And that’s what the Dhandho Investor is all about.
So in this book review I’ll share why you should read The Dhandho Investor, as well as my favourite part of the book and what this value investing book leaves out.
Now let’s get into this book review…
Why You MUST Read The Dhandho Investor:
The Dhandho Investor is a fantastically simple investing book. While a lot of value investing and technical trading books are tough to understand, The Dhandho Investor is very easy to grasp. Plus the book is only about 180 pages and the font is quite large. So you can whip through The Dhandho Investor in a couple of days without a sweat.
Now as for the content…
The Dhandho Investor is primarily based in anecdotes and examples. The Dhandho Investor starts out with a discussion of simple yet profitable business models. It explains what you should look for when evaluating businesses and investing in them. The colloquial nature of the book makes the concepts really easy to grasp. But don’t get me wrong. The Dhandho Investor is much more than just simple stories.
The Dhandho Investor quickly moves on to talk more explicitly about the low risk pursuit of wealth, and exactly what you should look for when you’re investing in stocks. Along the way, the author shares lots of insight and examples of his own investing decisions (like why he copied Warren Buffett’s investing strategy), what made him pass up on certain stocks, and why he was compelled to pull the trigger on other equity purchases.
The Dhandho Investor covers a wide variety of discussion topics that will be of interest to investors. And you’ll be happy to know that each topic is covered in just enough detail that you get the hang of it, without getting overwhelmed or bored. Finally, the information is also very actionable. For example…
There is some great content on how investors should decide when to buy and sell a stock that can really help you improve your returns and avoid selling too soon or pulling the trigger on a risky deal. Getting authoritative answers to these fundamental questions is incredibly valuable.
But thats only the tip of the iceberg. Now let me share my favourite part of The Dhandho Investor with you…
The Best Part About of The Dhandho Investor:
The best part of The Dhandho Investor is how simple the book is. I’m not sure how the author does it but he really demystifies the world of value investing, which is no small feat. There are even a couple of simple discounted cash-flow examples that you might need to read twice if you’re new to this stuff. But…
For the most part The Dhandho Investor does a very job keeping it simple. If you were thinking about reading Security Analysis but are a bit intimidated by the length and scope of the book, then The Dhandho Investor might be a much better place to start getting up to speed with the basics of value investing.
That said, The Dhandho Investor isn’t perfect. So just as a warning….
Here’s What The Dhandho Investor Leaves Out:
While The Dhandho Investor is a really great book, there are a couple of things it leaves out. This is in large part because the book is only about 180 pages. So you can’t cover the entire world of investing with a book that short.
And even though The Dhandho Investor provides a couple of references for the reader, it largely leaves out some of the more complex aspects of value investing. I think this is okay (and the book might actually be worse if it were too dense). But The Dhandho Investor sort of assumes that you will do further due diligence and research.
Of course this is standard practice for value investors but a little more focus on external references might have helped. But you’ll probably enjoy The Dhandho Investor more if you have a little bit of familiarity with value investing.
So do you think The Dhandho Investor the book for you?
The Dhandho Investor – The Final Word:
The Dhandho Investor is an excellent book. I was able to get through it very quickly while still absorbing a ton of information and knowledge. I really found the simple approach to be refreshing and powerful. So if you’re curious about the world of value investing and how to apply it to your portfolio I recommend you buy The Dhandho Investor on Amazon today.
The Dhandho Investor really helped me round out my view of value investing. And it helped reinforce some very important concepts that I was admittedly a little foggy on. If you need a new book this month look no further than The Dhandho Investor. If you want more information you can also watch the video book review below.