Li Lu has been called “the Warren Buffett of China” and has one of the best long term investing records of all time. He gave a very rare interview this month, covering his 6 principles of investing:
- Fish where the fish are - there are certain markets, industries, businesses, geographies that will be better or worse for investing
- Your Wealth is a percentage of ownership of global purchasing power. Buy great business in the most dynamic economies, and wait long enough for value to be created.
- The market is there to serve you, not to instruct you. Don’t be dictated by what the market decides to do at any given time
- Stay in your circle of competence: invest in businesses and products you understand.
- Enormous attention paid on the downside protection. Need margin of safety since investing is about the future which is inherently unpredictable. Over time, it’s remarkable how compound returns works. And the basic idea of compounding is that you don’t lose what you already have.
- Think of a stock as a piece of ownership of a business, not as a piece of paper that you trade around.
