The only way one should buy stocks is if you understand the underlying business. You stay within the circle of competence. You buy businesses you understand.
Mohnish PabraiWall Street sometimes gets confused between risk and uncertainty, and you can profit handsomely from that confusion. The low-risk, high-uncertainty [situation] gives us our most sought after coin-toss odds. Heads, I win; tails, I don't lose much.
Mohnish PabraiBasically if you study entrepreneurs, there is a misnomer: People think that entrepreneurs take risk, and they get rewarded because they take risk. In reality entrepreneurs do everything they can to minimize risk. They are not interested in taking risk. They want free lunches and they go after free lunches.
Mohnish Pabrai