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Chairman Rigg, the founder of Himalayan Capital, served as Deputy Commander-in-Chief during the Tiananmen Square pro-democracy protests in 1989 while attending Nanjing University, at which time he was wanted by the Chinese government. After defecting to the United States, he entered Columbia University and simultaneously earned a Bachelor's degree in Economics, a Ph.D., and an MBA.
In 1997, he founded an investment firm called Himalayan Capital in New York, and he is currently active in non-profit organizations such as Community 4 Economic Development. In 2001, he was selected as a Next Generation Global Leader by the World Economic Forum. He began investing under the influence of Warren Buffett and is known as an investor trusted by both Warren Buffett and Simon Go.
He became famous for persuading Warren Buffett to invest in China's BIAD Motors. The purchase price per share in 2008 was 1.5 Hong Kong dollars, which is said to be 253 Hong Kong dollars today. The portfolio of the fund he manages is said to be simple, based on his investment philosophy that there is no reason not to engage in concentrated investment if one invests according to investment luck and sound judgment.
1998 It is said that the annual average investment return has exceeded 30% since the IMF financial crisis. It is reported that current assets under management exceed 20 trillion won. Below is the content of a lecture given by value investor Li Lu at the Columbia NBA on April 10, 2021. For new investors who have started investing today, there are a few important things.
First, you must have a sense of ownership. I ask students and analysts to imagine this: Imagine that an uncle you didn't know well suddenly gifted you 100% of the shares in his company. Now, imagine you are analyzing that company. If you think of it as owning 100% of the shares, your attitude toward analysis will change completely.
Originally, you didn't know the company existed, but now that you own 100% of the shares, you won't know how the company is run or who works there. What should you do? You will want to learn about everything. Everything related to it, as much as you can. You won't understand many parts; you will only know a few facts.
But that is okay. You will want to keep learning until you become familiar with it. Even if you think you know everything, you must continue to study because situations change. If you analyze a company with this sense of ownership, true You have begun the process of becoming a value investor. This is the first piece of advice I would like to urge you to share as the owner.
Second, cultivate intellectual honesty. This is a very important virtue. You must distinguish between what you know, what you think you know, and what you are pretending to know. You might unconsciously think you know something. You must be honest about what you do not know. How can you determine if you are being sincere?
This is a quote from Charlie Mungott that left a deep impression on me: You do not need to hastily decide on your own opinion. Find arguments made by the smartest people on Earth that contradict yours, and if you find yourself more logical than them—if you believe your point is correct—then you may establish your own perspective.
The same advice applies to investing. Intellectual honesty is a virtue beneficial for living life; it is very important and essential for investing. The stock market seems to exist just to expose your weaknesses. It reveals your immorality, your bluff, and that your knowledge was a lie. If you do not pursue an attitude based on intellectual honesty, you could literally fall apart during your investment life.
It seems the stock market is designed that way. Third, spend as much time as possible studying the history of companies. Also, study the biographies of great business leaders of the past. More Studying companies equips you with the ability to discern whether they represent a good investment opportunity.
It helps you grasp the fundamentals of companies you are interested in. I believe all three of these are important. First, cultivate an ownership mindset assuming you hold all the shares; second, continuously train yourself based on intellectual honesty; and finally, thoroughly study the company's history.
These three will be very helpful if you are just starting to invest or want to improve your investment skills. These are the pieces of advice I can offer. Fourth, you must always be a generalist when it comes to studying companies. To invest well, you must have an intense natural interest in corporate fundamentals and in every business.
You must strive to uncover the truth. To be honest, it is rare to know the truth. By the time you decide which company you truly want to invest in, you must become a true specialist. Hopefully, you must possess enough expertise to know more than anyone else in the world, including top management. This is because managing top companies directly tends to lead to being buried in personal biases.
They may not think about the company as objectively and rationally as you do. You need to scrutinize what management says. You must become a true specialist regarding the company you have decided to invest in. Overall, regarding investment You must adopt a generalist's perspective on this matter, and therefore, you must strive to ensure that your scope of competence evolves over time.
If I were still investing the way I did when I first took my investment classes, I would not be where I am today. Fortunately, our scope of competence is established, and we are constantly learning. In some ways, it is astonishing to look at how companies have changed over the past few decades; they will continue to change in the coming decades.
Because of this, I consider myself fortunate, as I can satisfy my intellectual curiosity. I enjoy always being able to learn from the great people and companies that contribute to social development. I feel joy every day because I am able to do the work I do.
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