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Month: April 2019

Why Debt Is Like Russian Roulette

Why Debt Is Like Russian Roulette

Since the mid-1950s, global indebtedness has exploded to record levels. At the beginning of 2019, the IMF reported global debt reached an all-time high of $184 trillion in nominal terms at the end of 2018, equivalent to 225% of 2017 GDP. On a per capita basis, the world’s debt now exceeds $86,000, which according to the IMF is “more than 2½ times the average income-per-capita.” Further data show that the private sector’s debt has tripled since 1950 making it “the…

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Mohnish Pabrai: The Most Common Mistake Investors Make

Mohnish Pabrai: The Most Common Mistake Investors Make

Mohnish Pabrai is widely considered to be one of the best value investors managing money today. He runs the Pabrai Investment Funds, a group of hedge funds modelled on Buffett’s original partnerships. Returns since inception have been highly impressive. $100,000 invested with Pabrai on July 1, 1999 (inception) was worth $1,164,600 at the end of 2018, a compound annual return of 13.4% net of fees. I’ve learned quite a bit from reading and listening to Pabrai’s advice over the years,…

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Seth Klarman On Catalysts In Value Investing

Seth Klarman On Catalysts In Value Investing

One of the most frustrating scenarios to be faced with as an investor is a stagnant stock price. You’ve done all the hard work, analysed the company correctly, invested at a deep discount to intrinsic value and waited patiently only for the stock to trend sideways for years. In areas of the market where mispricings are most common, particularly in small-cap and micro-cap stocks, this scenario is all too common. It can take years for a stock to close the…

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