I am a keen follower of csinvesting, and he posted a video link to Pabrai. One of the things he emphasises is "be a cloner". Just copy what the great investors are doing. He says that your error rate will go down considerably. What we have to try to do is overcome our inherent human weakness of trying to be clever. He told one member of the audience to set up a fund that copies Buffett. He said that no such fund exists – yet backtesting revealed that if you bought shares on the last day of the month that Buffett bought, at the highest price for the day, and sold when Buffett sold on the last day of the month, at the lowest price for the day, then you will beat the indices handily.
John Chew, author of Csinvesting, did a study on Pabrai, and discovered that his worst mistakes were often due to making investments in companies that were overleveraged. I seem to recall that Pabrai did a study on Buffett, and the most disasterous mistakes he (Buffett) made was buying overleveraged companies. An analysis of Anthony Bolton’s biggest mistakes shows that, once again, overindebtedness was the biggest problem.
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