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Day: 26 May 2020

Mohnish Pabrai: Avoid Stocks You Don’t Understand

Mohnish Pabrai: Avoid Stocks You Don’t Understand

The highly successful growth investor Peter Lynch once advised investors to “buy what you know.” Another way to interpret this is to buy what you understand. Lynch isn’t the only successful investor that has recommend the principle of sticking to companies you understand. Warren Buffett, Charlie Munger, Seth Klarman and Mohnish Pabrai have all stated that this one of the essential principles in the world of finance. Warren Buffett calls his sphere of understanding his circle of competence. He will…

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