Quote · My First Million
Mohnish Pabrai: This will save you 10 years of bad investments
Where this was said
Mohnish's stock picks for 2026
At 1:12:04 · chapter starts 1:08:10
Pabrai lays out the mathematics of why stock picking is so brutal and yet so rewarding for the small group who master it [1] — Mohnish Pabrai "Only 4% of US companies have driven the entire stock market's 90-year return. Buffett made 400+ investments but just 12 created Berkshire. …" 1:06:22 . Over 90 years of US stock market history, just 4% of companies have generated the entire cumulative return. The other 96% have broken even or lost money. Warren Buffett's personal track record is a perfect mirror: 300-400+ investments made over 60 years, but just 12 of them created Berkshire Hathaway. A hit rate of 3-4%. The corollary is Pabrai's 'circle the wagons' concept: in a world where capitalism's competitive destruction forces almost every business toward zero, the rare businesses that build genuine moats — McDonald's brand, FICO's entrenchment, Coke's global taste — must be held forever. Not selling Coke. Not selling Apple. Not firing Ajit Jain. Those non-actions were worth more than all of Buffett's hundreds of other decisions combined. The future is the same: Pabrai doesn't know which half of his current bets work, but a 40% hit rate produces a home run, and the ones that work compound for decades if he doesn't touch them.
S&P 500: bearish, agrees with Howard Marks that elevated P/E ratios mean near-zero forward returns for a decade. GLP-1 drugs: too hard pile, but $79B vs AI's $40B shows where the real disruption money is. AI: invest in TSMC and ASML, not Alphabet and Meta. Bitcoin: too hard, still prefer gold.
