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Manilal Dhando
To dismiss the idea that the story described in the previous chapter was merely a consequence of fortunate timing and luck, the author describes another winning entrepreneurial venture where the risks were low and the potential upside was high. It is about Manilal Patel, a man who immigrated as an accountant but could not secure a job due to his broken English.
For several years Manilal worked for minimum wage, gradually building wealth while searching for a business to own and operate. For twenty years, he worked around the clock and began to invest in residential real estate. After 9/11, he got the break he was waiting for. The hotel market was suffering once again because travel was down. Manilal managed to take advantage by finding some partners and putting his capital into the purchase of Best Western hotel. Manilal borrowed $1.4 million against his house to help fund the down payment required for the hotel.
The author then goes into further detail on the different scenarios of the hotel's returns. However, the lessons he attempted to explain here in this book are clear:
1) When an incredible investment opportunity is available, a bigger investment should be made. He calls it: "Few bets, big bets, infrequent bets"
2) Take part in investment opportunities that have minimal downside risk but high upside potential: "Heads, I win; Tails, I don't lose much"
The idea behind this chapter is about doing business which has a significant upside, accompanied by a non-existent downside.
