Here are great five tips from Pabrai for 10-100 baggers
Pabrai outlined the five different types of stocks he believed were the best placed to achieve this goal. This list included:
- Companies that can be run by idiots.
2. Companies that cannot be run by idiots.
3. High-uncertainty, low-risk opportunities.
4. Bankruptcy reorganizations.
5. Bubble stocks.
“Those are the five models. We have the huge tailwinds with the idiots who can run the company and the company does well. The second is a huge tailwind, but you cannot have idiots, you need smart people running it like Amazon and GEICO. The third is markets getting confused between risk and uncertainty. We talked about Ipsco and Tesoro, Frontline, and Teck Cominco on that. The next one was the grave dancer, Sam Zell. Bankruptcy, reorganizations, public LBOs, busted LBOs, special situations. Those can all work out quite well as well. Then you finally have the upside without downside which has happened only once to me. They have the most mega bubble that I had in 22 years in the late ’90s with the dot-coms.”
