Monday, July 30, 2007

What is business if not an endeavour to create wealth?

Book Value
The Dhandho Investor
Mohnish Pabrai

Mohnish Pabrai speaks of a low-risk method to earn high returns in ‘The Dhandho Investor’ ( “Dhandho (pronounced dhun-doe) is a Gujarati word. Dhan comes from the Sanskrit root word dhana meaning wealth,” he explains. Dhan-dho, literally translated, means ‘endeavours that create wealth,’ but the street translatio n is simply ‘business’. What is business if not an endeavour to create wealth, the author asks?

The book opens with ‘Patel motel dhandho’. Do you know that Patels of Gujarat, who number less than one in five hundred Americans, “own over $40 billion in motel assets in the US, pay over $725 million a year in taxes, and employ nearly a million people”?
They started arriving in the early 1970s without much in the way of education or capital, narrates Pabrai. “Their heavily accented, broken-English speaking skills didn’t improve their prospects either. From that severely handicapped beginning, with all the odds stacked against them, the Patels triumphed.” How? “There is one word explanation: Dhandho.”

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