Last Tuesday, I was having coffee with a client—a successful tech entrepreneur who’d built and sold two companies. He pulled up his portfolio on his phone and confessed something that made me smile: “Sandeep, I’ve been quietly buying everything Rakesh Jhunjhunwala’s family has been accumulating for almost a decade now. Is that terrible?”
Terrible? Not at all. In fact, he’d stumbled onto one of the most underappreciated strategies in wealth creation: copycat investing, or as legendary investor Mohnish Pabrai calls it, “shameless cloning.”
Somewhere along the way, we were taught that originality was everything.
In school, copying was punished. At work, it was frowned upon. And in investing? It became an unspoken rule: if you are serious about compounding wealth, you must do your own research, find your own ideas, and build your own edge.
We’re conditioned to value original thinking and independent research. But what if the smartest approach isn’t to outsmart the market, but to systematically follow the smartest players in it?
Cloning, in this context, is not mimicry. It is the disciplined art of borrowing conviction, not blindly but with filters, rigour, and self-awareness.
This newsletter is about cloning as an investment strategy.
Today, we will cover-
- What is cloning?
- The science behind “shameless cloning”
- When copycat investing works (and when it doesn’t)
- Factors to look out for when cloning successful portfolios
- Cloning guardrails that improve clarity
- Cloning approaches used by successful copycat investors
Let’s dive in.
What is cloning?
The premise of cloning is disarmingly simple: track the investments of proven market performers and replicate their buy/sell decisions. Rather than spending months analysing balance sheets or trying to time market cycles, you piggyback on the research and conviction of investors who’ve already proven their ability to generate alpha.
Cloning gives investors a psychological scaffold. It reduces noise. It narrows the universe. And most importantly, it anchors decision-making to the conviction of someone who has consistently outperformed.
In 2008, researchers Gerald Martin and John Puthenpurackal published a now-famous study:
If you had simply copied Warren Buffett’s trades disclosed in Berkshire Hathaway’s 13F filings with a one-month delay, you would have outperformed the S&P 500 by 10.75% over a 30-year period from 1976 to 2006. The mimicking portfolio experienced a 51,399% cumulative return, which beats the S&P 500 index by a factor of 12.7 times.
One of the strongest advocates of this approach is Mohnish Pabrai, an Indian-American investor and founder of Pabrai Investment Funds. Inspired by Buffett and Charlie Munger, Pabrai has openly built his investing career around cloning.
He puts it bluntly: “If you take what Buffett did, you’re already beating the market by 10–11% per year.”
But, here’s where he does things differently.
Pabrai doesn’t clone indiscriminately – “I just give a slight tweak to it. I don’t buy what others are buying. I first look at what they are buying. Then I buy what I can understand and limit myself to two–three decisions a year.”
The broader takeaway is that cloning works when you copy the right things from the right people and add your layer of judgment.
When you clone wisely:
- You save time on ideation and screening
- You stay anchored to proven frameworks
- You sidestep impulsive trades driven by fear or FOMO
In a world with too many investment options, cloning brings focus. And that, in itself, is an edge.
The science behind “shameless cloning”
Let’s get one thing out of the way: cloning is not copying blindly.
It’s not jumping on a stock because a well-known investor holds it. And it’s certainly not a shortcut for thinking.
Cloning is about studying a trusted investor’s portfolio, understanding the thesis behind each bet, and filtering it through your own circle of competence.
It’s not just about what they bought. It’s about why, when, at what size, and whether it still makes sense for you.
Mohnish Pabrai refers to poor cloning as “half-baked cloning”-
“Most people are willing to clone but only partially. They buy what Buffett buys, but they don’t do the rest of it. That is stupid cloning.”
Good cloning involves:
- Understanding the investor’s philosophy and time horizon
- Avoiding bets outside your understanding
- Staying invested for years, even when the market tests your conviction.
- Knowing when not to clone at all
Done well, cloning is a disciplined, repeatable process. Done poorly, it becomes speculation dressed up as strategy.
When copycat investing works (and when it doesn’t)
The effectiveness of copycat investing isn’t binary. It works well under certain conditions and fails predictably under others.
Where it excels:
- Market learning and conviction building: For investors who lack the time or expertise for deep fundamental analysis, copycat investing provides access to professional-grade research. It’s particularly effective for busy professionals who understand the value of proven strategies but can’t dedicate substantial time to market research.
- Sector rotation and macro positioning: Established investors often have superior access to macro-economic intelligence and sector-specific insights. Following their sector allocations can provide early signals about structural shifts in the economy.
Where it struggles:
- Misalignment with goals: The biggest limitation is timing mismatches. Big investors can remain invested in a stock for decades, while retail investors might need to raise funds for emergencies, children’s education, or property purchases.
- Behavioural discipline: The most common failure mode is impatience. Successful larger investors hold investments for several years before they actually yield returns. Most investors rarely have this patience and often book losses during the waiting period.
- Disclosure delays- Most portfolios are revealed well after the trades are made. By the time you act, the price may have moved significantly.
- Limited view on conviction or context- You see what they bought, but not why they bought it or how strongly they believed in it. Without context, it is easy to misread the signal.
- Sizing mismatch- Cloning the stock is easy, cloning the conviction behind the size is not. What looks like a small position for them might represent a far bigger risk for you.
Factors to look out for when cloning successful portfolios
Cloning only works as well as the investor you choose to follow.
And that’s the real filter—not just what they’ve bought, but who they are, how they think, and whether their approach makes sense for you.
If you’re going to borrow conviction, you need to choose the source wisely.
Here are a few criteria I have observed some successful copycat investors follow –
Cloning guardrails that improve clarity
If you are exploring a cloning-based approach, structure matters a lot.
- Allocation discipline
- Cap total clone exposure to a certain % of your portfolio. This ensures you still retain autonomy and flexibility with the remaining 60%.
- No single stock exposure beyond 10%, even if the original investor has a higher allocation. Clone the idea—not the risk.
- Rebalance quarterly to maintain target weights and remove drift.
- Exit criteria
Know when to step away:
- Reduce systematically if the original investor’s stake drops or your conviction is shaken
- Conduct a performance review every 18 months to validate thesis strength
- Consider macro exits during periods of extreme dislocation—your context matters too
- Information sources
To clone with confidence, use reliable data:
- Shareholding disclosures (every quarter)
- Mutual fund portfolios, published monthly by all AMCs
- Block and bulk deal data, updated daily on NSE/BSE—great for spotting large trades
- Annual reports and investor presentations to understand underlying conviction
The good part is that in India, those who are cloning the investments of other successful investors, have an edge.
India’s public markets offer more transparency –
- Listed companies must disclose all shareholders holding 1% or more every quarter.
- Mutual funds publish their full portfolios monthly, by mandate.
- Block deals (over 0.5% of equity) and bulk deals (over ₹5 crore or 5 lakh shares) are reported daily on NSE and BSE.
This level of disclosure creates a rare advantage. It gives you real-time insight into institutional conviction, making it easier to study, track, and build your own clone strategy with confidence.
Cloning approaches used by successful copycat investors
Cloning only works when applied thoughtfully. It’s not about copying blindly or rushing to execute after every disclosure . It’s not a strategy for everyone. It demands patience, rigour, and a strong sense of self.
Here are four commonly observed approaches investors have used:
1. Full portfolio replication
In this approach, investors mirror the entire portfolio of an investor or fund they deeply trust—ideally, one with a concentrated, transparent strategy. This requires conviction, capital, and patience.
Works best when:
- The investor discloses regularly
- The style aligns with your risk appetite
- You’re prepared to track entries, exits, and position changes over time
2. Single stock clone strategy
This is a sharp focused approach, where copycat investors track a trusted investor’s portfolio and align with their single highest-conviction holding and allocate meaningfully to it. Works best when:
- The investor signals conviction through concentrated position sizing.
- You want a low-effort, high-focus clone model with clear rationale
- You’re comfortable tracking a few trusted managers and prefer clean, decisive exposure
3. Conviction core strategy
A more selective approach. You focus on the highest-conviction ideas, i.e, typically the top 20–30% of the portfolio by weight. This trims the noise and keeps your attention on the bets the investor is most serious about. Works best when:
- The investor runs a concentrated portfolio with clear top picks
- You want to reduce exposure to tail-end positions that dilute returns
- You’re cloning across multiple managers and need a clean overlap set
4. Circle of competence strategy
You study the full portfolio but only act on ideas that align with your domain expertise. Everything else is filtered out. This is the most sustainable long-term cloning model for individual investors. Works best when:
- You have sectoral or business model-specific expertise
- You want to avoid overreliance on someone else’s conviction
- You prefer slow, high-conviction decision-making over full replication
In summary
The reality about copycat investing is more nuanced than it appears. While the strategy can work, it requires a level of systematic discipline, market intelligence, and behavioral control that most individual investors struggle to maintain consistently.
As Mohnish Pabrai puts it: “You don’t need to be extraordinary to get extraordinary results. You just need to avoid stupidity and stay in the game.” But here’s the challenge—avoiding stupidity in markets is harder than it sounds, especially when you’re working with incomplete information and mismatched time horizons.
For busy wealth creators, the appeal of systematic cloning is understandable—it promises institutional-quality research without the time investment. But the execution gap between theory and practice often proves wider than expected. The information asymmetries, timing mismatches, and behavioral challenges we’ve discussed aren’t just minor inconveniences; they’re structural limitations that can significantly impact returns.
The question isn’t whether copycat investing works in theory. The question is whether you have the infrastructure, discipline, and market access to make it work in practice—or whether partnering with professionals who manage wealth full-time might be a more reliable path to wealth creation.
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