10 Brilliant Value Investing Quotes by Li Lu

Li Lu is a deep value investing superstar who focuses on investing into great companies in China and Asia. 

Himalaya Capital (founded in 1997) follows the same value investing philosophies as Warren Buffett & Charlie Munger. 

This multi billion dollar firm aims to achieve superior returns by being long-term owners of high quality stocks that have a substantial “economic moat”, great growth potential and are run by trust worthy people. 

As Li Lu likes to “partner with the business owners” some of his stock positions date back to their inception twenty years ago.

Investing Strategy:  Deep Value Investor, Long term, Emerging Markets, China

What does Li Lu own in China?

Li Lu’s Himalaya fund owns a variety of stocks in China. According to their latest 13-F filing, Li Lu had Alibaba Stock in the first quarter of 2020, before they sold in the 2nd quarter, sold -175 thousand shares.

However, it could be the case that they have purchased back Alibaba on the Hong Kong stock exchange. They also sold Baidu stock but again could have repurchased on the Hong Kong Stock Exchange. Himalaya also owns Pinduoduo (PDD) with an average buy price of $119.

 Fun Fact: Li Lu encouraged Warren Buffett and Charlie Munger to invest in the Chinese automaker in 2008. BYD’s stock price has soared by over 400% since then.

Which Stocks does Li Lu own?

According to Himalaya capitals 13-F Filing, Q3 2021. Li Lu owns, the following stocks. 

Stock	% of Portfolio	Value (X $1000)
BAC – Bank of America Corp.	24.86%	$297,728
GOOG – Alphabet Inc. CL C	10.51	$126,239
FB – Meta Platforms Inc.	9.72	$348,589
AAPL – Apple Inc.	5.08

Is Li Lu a Billionaire?

Li Lu is the fund manager &founder of Himalaya Capital which has $2 Billion in assets under management. Li Lu is  has a net worth of $200 million dollars and thus is officially not a billionaire yet. 

1. Humble Beginnings

“I grew up in communist China & Never had much money, then all of a sudden, I had giant student loans” – Li Lu (Value Investor). 

It is good to remember our roots as this can keep us humble & realistic as we become more successful. Also Student loans can be a nightmare! 

2. Look at the Downside before Upside

“Being a value investor means you look at the downside before looking at the upside” – Li Lu (Legendary Investor). 

Assessing the risk first & the worst case scenario can be a great tactic for success, then let the upside take care of itself.

3. Intellectual Honesty

“Investing is Intellectual Honesty, you want to know what you don’t know” – Li Lu (Value Investor).

Intellectual Honesty is vital for investing success you can’t trick yourself into believing something which isn’t factually correct. 

4. Assess Management

“Management is part of the companies success equation. The Quality of management always matters” – Li Lu (Legendary Investor)..

It is crazy how often I see purely number focused “quantitative investors” overlook the power & influence of management. Businesses are run by people, thus someone who can set a vision, execute and motivate a team is vital for success. 

5. Gain an Investing Edge

“The game of investing is a process of discovering what your good at, what you love to do then magnifying that until you gain an edge” – Li Lu (Legendary Investor).

Self Awareness is a great starting point & understanding if there is a particular area, you may have a special insight. Great Investor Peter Lynch believes our own experience or even job can help to give us a special edge over Wall Street. For example, a housewife may be more aware of a particular baby product selling out fast than an analyst in Wall Street. 

6. Know your Bling Spots

“Everyone has Blindspots, even the brightest people are no exceptions” – Li Lu (Legendary Investor).

Self awareness comes before self development, it may be hard to spot your own blind spots (which is why they are “blind). The worlds largest hedge fund manager Ray Dalio suggests seeking “Opinions from credible people who disagree with you”, this can help to identify blind spots. 

7. Zero Sum Game

“There is an element of a Zero Sum Game in Investing, if you buy…somebody else has to sell. You can’t both be right” – Li Lu (Legendary Investor)

This quote really does help to highlight the different perspectives in investing, if you are selling, who is buying and vice versa. What reasons do they have? 

8. Come into your own

“The Game of investing is to come into your own, you must find a way which perfectly fits your personality” – Li Lu (Legendary Investor).

Self Awareness comes before Self development, then match your investing strategy to your personality. If you will lose sleep if a stock drops by 40%+ then you shouldn’t be investing into that stock (or you should be well diversified) .

9. Free Market

“Without a free man, there is no free market that is called exploitation” – Li Lu (Legendary investor)

A free market requires human rights to be respected. 

10. Money Makes Money

“Money makes money, without capital there is no-ism” – Li Lu (Value Investor)

As the sums get larger, the power of compound interest becomes more prevalent. For example, a 10% return on $10k is just $1000 but a 10% return on $1 million is $100k. 

BONUS: Funny but true! 

Too much wealth when young can really alter a persons value system and does not help them to become a better human being. This is why you see lottery winners going broke 6 months later. True wealth is earned & thus valued. 

Want to learn how to invest?

If you want to learn how to be a great investor, join our Investing Strategy Course or Stock Research Platform.

We open the community to a limited number of people each month so click the links above to find out more.

Li Lu Quotes Gallery