Mohnish Pabrai - Buffett Partnership Structure, Lunch with Buffett & Munger, Great Businesses

2007: $80M net worth from using Buffett's IP without royalties. Felt owed tuition. Won 2007 lunch with Guy Speer for $650,100. Only wanted to thank him. Buffett's model: make winners feel got bargain. 2008 lunch: said here all afternoon, nothing else. Daughters call me Warren so adults learn. Within 5 minutes felt like grandfather.

Wife Harina huge Munger fan, bigger than Warren. Warren competitive: Charlie old/boring, I'm interesting. Warren arranged Munger meeting to ensure value. Met Charlie 3+ hours at office. Charlie immediately loved Harina, said 'you married well'. Always asked about Harina not Mohnish. Built deep friendship, saw 15-25 times/year. Last visit Thanksgiving before passing.

Early 60s Buffett unified partnerships. First 6%/year to investors. Above: 25/75 split. Down year: make up loss + 6% annualized before fees. Win-win, aligns interests. 20%/year = 3.5% fee on others' money. Investors happy with 16.5% after fees. Would not change if starting again.

Buffett: explaining walking to fish - 1 day doing worth 1000 years explaining. Running business: payroll, sales, customers, service, turnover, hiring. Teaches way world works, better understanding. Dangerous to look through spreadsheets. Better: kick tires, CEO driver's seat, 3-4 key variables, handicap outcomes.

Charlie: discuss with peer investor who cares and is good, not just analyst. All have blind spots. Get to aha moment: why no-brainer. 25+ years learned: greed misleads. Need circuit breakers. Pre-investment checklist: 160-170 questions. Run everything through before investing.

American Tower: can't move towers, AT&T keeps paying beyond lease. CFO feet on desk - everyone knows what he'll pay, no work. Great business definition. IEX: 3%→7.5% India electricity, heading 20-35%. 75% revenue = net income. Country club atmosphere, 40 devs with little to do, 2-3 servers. 10x revenue = 50% more people, 72%→82% margins. 5-6x return, could run 20 years.

How long can great business grow above-average? Don't know - IEX could be 20 years or 3. Best guess: let it ride. 40% of fund, OK to 95%. Don't get many shots. Always expensive 80-100x. Never at 8x. Great question. Only need figure out once. One IEX or American Tower. Right about 30-40 year runway? Sit and let it rip. You're done.