5 Highlights of Li Lu Interview – April 2021

Li Lu was interviewed for 2 hours by Bruce Steinwald of Columbia Business School. This interview was streamed on YouTube on April 9, 2021.  The 5 highlights were:

(1) Li Lu invests in the relatively few businesses he can identify that are growing, earning a high return on invested capital, and have a durable competitive advantage.

(2) Investors in those businesses that are growing, earning a high rate of return on invested capital (ROIC), and have a durable competitive advantage, will earn rates of return that will converge with ROIC over time.

(3) For investors to be successful over time, they must have the temperament to control their emotions and hold on to stocks or buy more when they are down 60-70%, and avoid following the crowd when they are rising rapidly. Greed and fear have resulted in sharp declines every 10 years throughout history. It is part of human nature.

(4) China currently has the best investment opportunities in the world.

(5) Li Lu has had dinner every Tuesday with Charlie Munger for 17 years (except for a hiatus during the pandemic).