(22-10-2026, 06:12 PM)weijian Wrote: IIRC, there are not many interviews/articles that are publicly available on Li Lu.
36th Annual Graham & Dodd Event with Li Lu '96, Founder and Chairman of Himalaya Capital
A conversation with Li Lu '96 (’96 CC,’96 LAW), Founder and Chairman of Himalaya Capital and Tano Santos, the Robert Heilbrunn Professor of Asset Management and Finance, Faculty Director, Heilbrunn Center for Graham & Dodd Investing
https://www.youtube.com/watch?v=YRhnX_JAbC8
Quoted below from the transcript, well capturing the essence of investment.
Note: fish where the fish are, reminds me of Sg market when it's darn unloved. I reckon he could be referring to china market (or likely my own confirmation bias). To me personally I'd add Indo market to that as well. Simply amazing how a new Head can do so much damage but the valuation is simply great.
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The discipline of value investing started with Columbia. When Ben Graham first started his classes, it was almost 90 years ago. Of course, he practiced 10 or 20 years before that, so we call it a 100-year-old discipline. It really has evolved, but some of the core principles have not and have become timeless.
If I have to distill the main principles for the discipline of value investing, I would say there are six in my mind. Three come directly from Ben Graham, the namesake of today’s lunch; one each from Warren and Charlie; and we add a small twist — you could call that the sixth.
Here are the six basic principles in my mind that have guided our discipline, at least our practice, over the last 33 years.
Ben Graham laid it out pretty quickly as he started this discipline with three basic ideas. A stock is a piece of ownership, not a piece of paper to trade around. Buying stock is really the same as buying a company.
Secondly, the market is there to serve you, not to instruct you, which is a profound insight if you are in the midst of market activities.
Thirdly, investing is about predicting the future, which is inherently unpredictable. Therefore, you always want to require a margin of safety that will help protect the downside as well as make a better upside.
When Warren practiced, I think he added this further discipline, which I call a circle of competence. All of us are probably predisposed to have certain interests, and over time you develop particular expertise and try to study more and make it better.
The most important concept of a circle of competence is knowing the edge of it, because most of us are wired to think we know a little more than we actually do. Understanding the edge is as important as understanding what is inside it.
Charlie had this idea that you’ve got to fish where the fish are. He was a lifelong fisherman, and that is a wonderful analogy for the actual market. There are certain markets, industries, and businesses that draw a lot of attention. With that competition, your returns are averaged out.
Then there are other industries, businesses, countries, or markets that don’t attract enough attention and have far fewer fishermen. You do way better to fish where the fish are. It’s a simple idea, but in practice it is amazingly effective.
Lastly, over my own 33 years of practice as a global investor, applying the principles of value investing on a global basis at a time when global commerce is becoming one single market. One insight we have is that wealth, in the end, is really the percentage ownership of global purchasing power.
It isn’t expressed, especially in the modern economy, in the amount of gold, diamonds, or currencies of any kind. With inflation, all of those will dissipate over time. What is important is what you can buy with it, what you can use it for. A better measurement of wealth is your percentage ownership of global purchasing power.
The way we express that is by buying great businesses in the most dynamic economies at advantageous prices, waiting long enough for value to be created over time, and sharing proportionally in the upside. Here are the six basic ideas that I think can withstand the test of time and will serve everyone well.
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