Mohnish Pabrai is a well known investor who has been investing in stock markets since 1995. He turned $1m into $5m in 5 year period.

Mohnish Pabrai rules

• Patience - You make huge money by investing for long term. (At least 10 years)
• Circle of Competence - Invest in business that you understand. (It is also called as circle of competence).
• Intrinsic Value - Invest in stocks that are undervalued. Business may not be great but when the valuations are dirt cheap, it can turn out to be great investment.
• Moat - Invest in companies that have a moat - economic advantage that a company has over it's competitors.
• Index Investing - If you are newbie and want to invest in stocks, choose index fund.
• Clone portfolio - If you want to invest directly in stocks, you can clone portfolio of well known investors.

How to clone the stocks

You can use below resources to clone stocks.

• valueinvestorsclub.com
• gurufocus.com
• https://www.edgar-online.com/
• https://thecobf.com/
• https://www.grahamanddoddsville.net/ and https://business.columbia.edu/heilbrunn/resources/graham-and-doddsville-newsletter - graham and doddsville - letter from students of columbia business school

If you have any great stock ideas, you can send them to [email protected]

How to calculate intrinsic value of stock

You can use below methods to find intrinsic value.

• Discounted cash flow
• Dividend discount model
• Relative Valuation

Discounted cash flow example