저자: LiLu · 외국인
요약 보기
1989년 천안문 이후 미국으로 건너간 Li Lu가 버핏 강연을 계기로 가치투자에 입문했다는 이야기. 주가는 기업 소유권이며 안전마진이 필요하고, 시장은 단기적으로 비합리적이라는 원칙을 강조. 지식의 한계를 인정하고 능력범위(circle of competence)를 지키며, 소수 종목 집중 투자와 영구적 자본손실 회피를 핵심으로 제시. BYD 투자 사례(버크셔 2008년 투자)를 들어 장기 복리 관점을 설명. 영상은 특정 자산의 가격 전망은 언급하지 않음.
다듬은 글
A 23-year-old boy leaves his country and reaches America. No stable career, no investment background and no powerful family connections. And do you know what the most interesting thing is? He had not yet properly understood capitalism. But after a few years, an investor whom Warren Buffett considered his business partner invested his money with this boy.
Charlie Mars. And later this boy identifies a Chinese company in which Bert Shire Hathaway invests his 100 million dollars. That boy's name was Lilu. But Lilu's story is not just a poor to rich story. Actually, this story explains five principles of investing which are perhaps more important than stock tips.
And I will tell you the most powerful principle in a while. Because it explains why investors like Lilu see opportunities in the market? Rather, the normal investor is unable to see it even though it is in front of him. So Lilu was born in China. In 1989, he was one of the prominent student leaders of the Tina Square Student Movement.
He had to leave China after the crackdown and eventually reached the United States. After reaching America he had very little money. English was not strong and there was no clear road map for the future. Lilu himself later described that he was practically broke when he arrived at Colombia and that his primary objective was never to become successful.
All I had to do was survive and this is where the first lesson begins. To understand the financial market, one thing that is required before an economics degree is necessary. Lilu did not come into investing because he had a childhood dream of becoming a fund manager. Rather, he had student loans. He had to earn money.
Then a friend told him that there was a man at Columbia giving a lecture on investing and he could tell him something important. That man's name was Warren Buffett. So Lilu listened to Buffett and the meaning of the stock market changed for him. In that seminar of Warren Buffett, he got to understand three basic ideas that first of all the stock is not a flashing price.
Stock is ownership in a real business. The second thing he understood was that you need a protection between the value of the business and your purchase price, which is called margin of safety. And the third thing he learned from that seminar is that the market can be irrational in the short term. Your job is not to predict every moment.
Your job is to become the beneficiary of irrationality instead of its victim. This thing seems very simple. But this is where the biggest contradiction of retail investing lies. While buying stocks, we say that friend, I am a long term investor. But when the stock falls by 8%, we start checking the 15-minute chart.
Then they start checking the 1 hour chart. The company's business was the same yesterday also. It is the same even today. The product was the same yesterday and is the same today. Same thing management was the same yesterday and the same today. Only the stock price of the company has changed. Its quotation has changed and our conviction that we are long term investors gets shaken.
So Lilu learned to look at the market upside down. Considered the price as an offer not an invitation. Imagine having a profitable shop in your neighborhood. The owner opens the shop every morning. Customers come there regularly. There is a lot of crowd and the business is profitable. And one day the owner calls you and says that tomorrow I will sell 20% of this shop for Rs 10 lakh.
And the next day he gets emotional and says that now I will sell it only for Rs 7 lakh. Whereas the business did not automatically deteriorate by 30%. Only the seller 's mood has changed. So the stock market basically gives you exactly this opportunity every day. You might be thinking that Lilu's real age happened because he listened to Buffett's philosophy.
In fact, thousands of people have listened to Warren Buffett. His books have been read by millions of people. Still why don't you become Lilu? Because the next principle is quite uncomfortable which always tires the retail investor. According to Yael, one of the most important abilities in investing is intellectual honesty.
You should know what you know and more importantly what you don't know. If you convince yourself that you understand the company well. You have understood its business model. Whereas actually you have not understood yet. So you are not investing in it. You are gambling. Lilu has repeatedly emphasized the idea that investors should constantly ask themselves, "Do I really know everything I think I know?" This principle is very powerful in practice.
Suppose there is a semiconductor company that fell by 35%. The internet is saying that this is a once in a lifetime opportunity. So now you know what the question is? The question is not how much the stock is falling or how much further it can fall. The question is, do you understand the semiconductor cycle?
Do you understand who the company's customers are ? What is its prying power ? Do you understand this or do you understand how strong the competition is? Do you know what capex requirements are? Is the department manageable or not? Is there a risk of technology becoming absolute ? If you don't know the answer to all these, then this cheap stock that you see, which has fallen by 30%, can also be expensive for you.
Leelu's approach was to expand the circle of confidence. But don't pretend the circle is bigger than it actually is. So after graduating from Columbia in 1990, Lilu established Himalaya Capital. Initially his investing cycle evolved. He searched for opportunities, studied businesses and gradually came to an important realization.
And that realization was that extraordinary returns do n't require an extraordinary number of decisions. Sometimes the opposite is also true, that you have very few decisions to make. But when a genuinely exceptional opportunity comes, it has to be recognized. Here enters the story of Charlie Munger.
Leeloo and Charlie Munger developed a serious business relationship in the early 2000s. But he was so impressed by his thinking that he eventually invested a substantial amount of his family capital in Lilu's investment vehicle. Leno later described having several hours-long conversations with his manager on Thanksgiving 2003, and the relationship evolved into a long-term partnership.
Think of this situation as Charlie Munger, a man who spent decades evaluating businesses with Warren Buffett. He had the option to choose almost any money manager in the world. Still why did he trust Leelu? Because great investors don't just look at returns. He sees the thinking process. Leelu's process was not dependent on prediction.
His focus was to deeply understand the business, understand the downside, evaluate the management, look at the long term economics and take meaningful positions when the market is strongly in favour. The most famous example of this was BYD. Today almost every investor knows BYD. Electric vehicles, batteries, massive manufacturing operations.
But Lilu began studying the company when BYD was an obscure Chinese company to many Western investors. Lilu did not see only cheap stock in the company. He saw an unusual organization. Engineering culture was visible, execution capability was visible. A founder-led mentality was evident, and a company was rapidly expanding while solving difficult technical problems with limited starting capital.
Leelu saw all this. At the Daily General Meeting in 2013, Li Lu discussed BYD's early years, pointing out that the company achieved extraordinary growth with extremely limited initial capital. And here's a sal lesson: the average investor asks, what will the next quarter's EPS be? And the exceptional investor asks, if this organization compounds its capabilities over 10 to 20 years, what size company could it become?
So from this you must have understood the thinking of an intelligent investor. So the difference is not in prediction but in time horror. Eventually, Lilu brought BYD's story to Charlie Munger. Munger was impressed, and Bursch Hathaway's Mid American Energy made a major investment in BYD in 2008. Years later, BYD became one of Bercher Hathaway's most successful international investments.
The BYD filing confirms that the Bersher linked entity held 225 million H shares. Vahil Himalaya Linked Entity was also a major holder. Now let's not draw a dangerous conclusion here: the lesson is not to find a Chinese EV company and hold it for 20 years. The lesson is much deeper than this. Leelu bought the company when he had a differentiated understanding.
What Do Most Investors Do? Let's copy the result. Grade investors copy the process and that is what you have to learn and the next part of the process is concentration. Today, diversification has been made a universal rule of investing that there should be 20 stocks, 30, 50, 100 or so many stocks, there is a limit to diversification.
But the argument of a value investor is slightly different that if you understand a business exceptionally well , understand it well, understand whether the economics of the business are strong or not, if its valuation is attractive, the management is competitive and the downside is acceptable, then why would you invest money in your 35th best idea ?
Lu's portfolio has historically been concentrated. This means that he had very few businesses in his portfolio. Of whom he had deep understanding. Those were the only businesses. He had a long holding period. Recent US filings also show HAL's disclosed portfolio to be highly concentrated. But there is a thin line between concentration and recklessness.
If the knowledge is shallow and the position is huge, that is not conviction. That is overconfidence. Real concentration is sensible when the research level is also concentrated. This means that you have done deep research about the company's model and how it all works. And this brings us to Leelu's most powerful principal.
The real objective of investing is not to generate maximum returns. Rather, the aim is to avoid permanent capital loss. The stock may fall 30% temporarily and the business may eventually recover. This is volatility. But you have bought a weak company whose debt has increased a lot. His competitive advantage has disappeared.
The business has been permanently destroyed and the capital has also not been recovered. This is actually a risk. Retail investors often treat both the same. If a good company falls, we panic and sell it, and if a bad company falls, we average it out. Let's do exactly the opposite. In the Lu and Manger school of investing, volatility and risk are not the same thing.
Let me explain this. The real question is how much loss can I take permanently and this thinking changes your entire investing process. You will follow the tips less. You will read the balance sheet more. You will look less at price targets and understand business economics more. You will watch the daily market movements less and observe the long term decisions of the management more to understand what their thinking process is and perhaps the most important thing is that you will not feel the need to trade every day because investing is not a game of action but a game of selection.
Lilu's journey is definitely extraordinary, but the most valuable part of it is not the billion dollar fund. The most valuable part of him is that he has treated investing through an intellectual discipline: no what you own, no why you own it, no what can destroy it, pay a price that gives you protection and then give the market enough time so that the reality of the business can be reflected in the price.
The same man who was not clear about his next destination in 1989, years later, was evaluating companies in a 10-20 year horizon. Maybe that's why there's a deeper lesson hidden in Lilu's story. Be it life or investing, uncertainty is never eliminated. You can only improve your preparation. You cannot control the future of the market.
Interest rates cannot be controlled. You ca n't control the news. Even you cannot control the sentiment as to when the next crash will happen. But you know what you can control? You can do what you buy? How much do you pay ? How much do you understand this business? How much risk do you take and most importantly how patiently do you weigh it.
Perhaps the secret to great investing is n't predicting the market. Perhaps the secret is to be able to think positively when the world is continuously reacting. And when you finally get a genuinely extraordinary opportunity, you should have the knowledge to recognize it, the experience, the conviction to act, and the patience to wait for the results.
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