I have decided to switch my strategy to accommodate the current environment. I need to be more unreasonably unreasonable. The reasons for this were a couple of quotes I came by from Buffett and Pabrai.
In the current environment…we are rarely not making 10% bets. because I think that we are not able to find much. So when we do find stuff…I have enough time…to drill down as much as I want…and we want to go to the max exposure.
Pabrai 6/17/19
I don’t want to put the money(has 10% cash) in to get a double. We would like to get something north of 40%/year on the last 10%. It’s kind of like a 5-6x in 5 years.
Pabrai 11/12/18
“Once I see that it’s not a PE of 1, it’s gone as well.
Pabrai 6/17/19
If I was running $1 million today, or $10 million for that matter, I’d be fully invested… It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.
Buffett 1999
Pabrai’s targets 26%. And it’s apparent that he is currently aiming for even higher and is only accepting PE1 as new stocks in his portfolio.
I had a basket of banks. Which very well could double in the next 2-3 years. But an interview Buffett gave on 5/19 intrigued me. He basically said that he thinks they will be worth more in 10 years but that he doesn’t think they will do the best out of the entire universe. I don’t think he would be investing in them if he was investing the same amount as me. I sold the basket and put them into Pabrai’s new stocks. MU, EAF and FCAU, each one expecting a 26% and higher CAGR
The Rational Cloner 