The Dhandho Invester Book Review

I always wondered how Indian communities have a monopoly on certain businesses abroad. Be it the USA, UK, or Australia, I have seen sectors like Motels, Grocery & Cab services dominated by a particular Indian community. I have failed to understand how it became possible. After reading this book, I have an idea of how this happened & it helped me in joining the dots.

The author talks about how a certain community was banned in Uganda and was forced to leave overnight. The same community ended up owing more than 50% of motels in the USA in the next 30 years. Now, this looks like a Bollywood movie script on the face of it, but the author has narrated the amount of discipline, grit, and hard work which was demonstrated. The initial heavy lifting by the Indian community can't be ignored either. The obvious question which a reader gets is - that was a different era; is this possible today? 

This is where the author talks about the 9 principles that follow the Dhandho framework. These 9 principles constitute a major portion of the book but this is not a generic Gyan. There are multiple examples cited from Richard Branson to Laxmi Mittal to even some business tycoons who were school dropouts. So educational background has nothing to do over here. More than 50% of people who are mentioned in this book have never read books like "The Intelligent Investor" or even have read about the margin of safety. I felt the author wants us to focus on the process rather than the result. Simplicity is a powerful construct. Change can be the enemy of investments. So the stories shared do tell us that successful men were cognizant of the fact that change was inevitable, but it was only going to have an impact on the periphery of their businesses. The core was going to remain unaffected. For example, Motel Business is about renting rooms to motorists. Now the booking and payment can be handled digitally, but the fact remains that a budget tourist is going to sleep in a room. So the business model is not going to change. There is an upside but virtually no downside. It's "Heads I win, Tails I don't lose too much, kind of a bet. 

I always try putting things into a perspective and that's why I like reading nonfiction. When I was reading this book, I realized why 90% of the startups all over the world fail and close within the first six months. The Dhandho investor tells us to invest in simple businesses- ones where conservative assumptions about future cash flows are easy to figure out. That's why they say fundamentals are so important!