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homebusiness NewsThe lesson 'Mumbai ka Munger' and 'Bharat ka Buffett' learned from the originals

The lesson 'Mumbai ka Munger' and 'Bharat ka Buffett' learned from the originals

In a recent discussion with CNBC-TV18, Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services, and Sanjoy Bhattacharyya, Managing Partner, Fortuna Capital, shared profound insights inspired by the lessons learned from the legendary investors Warren Buffett and Charlie Munger.

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By Latha Venkatesh  Dec 15, 2023 1:21:36 PM IST (Updated)

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It's better to focus on understanding businesses than exclusively hunting for multibaggers, according to Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services, Mohnish Pabrai, Managing Partner, Pabrai Investment Funds, and Sanjoy Bhattacharyya, Managing Partner, Fortuna Capital.

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This, they said, profound insight is based on the lessons learnt from the legendary investors Warren Buffett and Charlie Munger. The lesson stands out because the initial investments in Berkshire Hathaway in 1975 is today worth more than 20,000 times.
"After buying the stock (Berkshire Hathaway), he (Buffett) met Charlie. And Charlie changed his mind by saying buy a wonderful business at a reasonable price rather than a fair business at a very low price, so that change actually brought him to buying Blue Chip stamps and then they bought Coke and everything — all the franchises," Agrawal said.
"So we learned from them that return on equity is more important, the franchise value is very important. So the quality culture came because of Munger. Buffett was a brand equity," Agrawal added.
ALSO WATCH: What is return on equity? Explained by Gurmeet Chadha, Managing Partner & CIO, at the New Delhi-based wealth and asset management firm Complete Circle.
The three pieces of advice that the Indian disciples of Munger and Buffett have to share are:
  1. Read about the business you are investing in. The size of opportunity, and the quality of the management for example.
  2. Buy a great business at a reasonable price than looking for cheap stocks.
  3. Invest in a good business and be patient.
  4. Know your circle of competence i.e. pick a subject area that matches your skills or expertise. "You don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence," Buffett reportedly explained in a 1996 letter.
  5. Be open minded. For a very long time, Buffet and Munger didn't want to invest in companies outside the US but they were persuaded by Li Lu, an Chinese-American investor, in 2003.
  6. As a stock market investor, how much should you care about macroeconomics? Apart from a look at interest rates, which is driven by inflation, Munger didn't pay a lot of attention to macroeconomics, according to Bhattacharya.
  7. Learn your lesson from a mistake and move on. Don't dwell on it. "You need to learn but don't learn too much," was Munger's advice to Pabrai (the later said).
  8. The hallmark of true wisdom is that Munger speak so little, says Bhattacharya who has met Munger many times.
  9.  Constantly read and keep learning. "Munger was a book with two legs," Bhattacharya added.
  10. Soldier on and never complain, no matter what the challenge. That's how Mohnish Pabrai remembers Munger. Pabrai had known Munger for over a decade, and met him a few times every year.
    11. (Edited by : Sriram Iyer)
    First Published: Dec 14, 2023 9:58 PM IST
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    Berkshire HathawayCharlie MungerFeaturesMultibagger stocksWarren buffet

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