Uploaded June 2026 | Updated September 2026, 3 weeks ago
Mohnish Pabrai discusses position sizing as a core principle of wealth building. His approach: limit any single position to 10% of your portfolio. This rule serves two purposes: it protects you from catastrophic losses (even a complete wipeout of a position is survivable), and it forces you to be selective about where you deploy capital.
If you can only invest 10% per position, you can only make 10 bets before your portfolio is full which means each bet has to clear a higher bar. This combines risk management with disciplined capital allocation. It's not radical, it's foundational to how successful long-term investors actually build wealth.
Mohnish Pabrai discusses position sizing as a core principle of wealth building. His approach: limit any single position to 10% of your portfolio. This rule serves two purposes: it protects you from catastrophic losses (even a complete wipeout of a position is survivable), and it forces you to be selective about where you deploy capital.
If you can only invest 10% per position, you can only make 10 bets before your portfolio is full which means each bet has to clear a higher bar. This combines risk management with disciplined capital allocation. It's not radical, it's foundational to how successful long-term investors actually build wealth.
