Li Lu Reflects on Getting Older

Li Lu shares some of the lessons he has learned over the years

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Brian Flores, CFA
Apr 20, 2016
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As the chariman of Himalaya Capital Management, Li Lu has become famous for his disciplined and value-oriented approach to investing. He just turned 50 and seized the opportunity to write about some of the important lessons he has learned. He touched upon some important aspects of success and wisdom in general.

Taking the journey

"If I have anything to do with that journey, it is simply that I took it. Woody Allen is right; 90% of success is to show up. At various stages in my life, I could have stopped or taken the long rest. For some reason, my heart told me otherwise. I just kept going. Half of the time, I wasnt sure where I was heading. The other half I was probably taking the wrong turns. No matter."

Having control of our emotions

"But I was on high alert to correct mistakes along the way. I was careful not to be influenced by emotions that I know are poisonous and counterproductive to the journey I want to take things like envy, resentment, hatred, jealousy, greed and self-pity. I certainly wasnt born with immunity to this side of human nature. In fact, my early life experiences may require me to work even harder than others to guard against these human vulnerabilities. And when I did fall prey, or when I took a wrong turn, I was fortunate to be able to correct them quickly. Socrates was right. An unexamined life is not worth living, certainly not living well."

The luck factor

"I will fail in a lot of professions. For example, I wont be good at ballet or basketball for that matter. My temperament and experiences prepared me well for a career in investment. I was extremely lucky to be introduced into the field by the greatest investor who ever lived when I accidentally stepped into a lecture by

Warren Buffett (Trades, Portfolio) at Columbia nearly 25 years ago. And it was even more magical 13 years ago when Charlie Munger (Trades, Portfolio) became my investment partner, mentor and lifelong friend. To this day, I dont know to what I would attribute this extreme fortune. It is something even the wildest imagination or the best fiction could not conjure."

Investing for the love of it

"Now that I have compiled a record of my own for over 20 years, still enjoy the game even better than when I started, I think I will simply continue. Im curious to see how long I can follow the great record set by my teachers, Warren and Charlie, that is by now well over 50 years. Not for the size of asset under management, not for the fees, just keep a scorecard the way a golfer would after each round and after a lifelong career. So value investing is likely a lifelong pursuit for me."

I think Li Lu's letter is a great reflection of some of the factors that contribute to success. Just as Buffettmentions, it seems to me that Li Lu also tap dances to work and that he is very much aware that one does not walk the road to success alone. In his book "Outliers," Malcolm Gladwell discusses the role of luck in our success, which is something that great investors acknowledge. We can certainly decide how to allocate our time and resources, but there are some things that we cannot control and/or influence.

Another critical aspect is Lu's willingness to correct his mistakes and emotional biases. These are very hard to straighten out; however, an examined life is certainly worth living, as he mentions. By applying these concepts, we are likely to improve not only our results but also our lives as we come close to wisdom.

What do you think?

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"I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you." - Charlie Munger