Knowledge | Posted by Hnin Ei Khin
In the early 2000s, Charlie Munger–Warren Buffett's longtime business partner – made an unexpected decision.
He handed almost $90 million of his family's fortune to a 38-year-old investor named Li Lu.
At the time, Li was a rising star in the investment world, often called the "Chinese Warren Buffett."
What followed was remarkable.
That initial investment grew into about $400 million, showing just how successful that decision was.
Li Lu, the founder of Himalaya Capital, had a reputation for applying the value investing principles of Ben Graham, similar to Munger and Buffett.
Instead of focusing on the crowded American market, Li turned his attention to Chinese stocks, where he saw immense potential. Munger once remarked, "We made unholy good returns for a long, long time," reflecting on the success of his decision to entrust Li with his family's wealth.
Munger noted that the initial $88 million investment had grown four or five times.
One of Li's most notable moves was his early investment in Kweichow Moutai, a brand of distilled liquor that became China's national drink after the communist revolution. Li recognized its potential while it was trading cheaply, at just four to five times its earnings. He went all in, buying as much stock as possible – a decision that paid off tremendously as Moutai became one of China's largest listed companies.
In a Financial Times article, Munger praised Li's foresight: “He just backed up the truck, bought all he could and made a killing."
"I'm 95 years old. I've given Munger money to some outsider to run once in 95 years. That's Li Lu." Munger saw something unique in Li, a combination of strategic thinking and an ability to seize opportunities others might overlook.
Li's investment journey wasn't without challenges. He fled China after the Tiananmen Square protests and eventually found refuge in the U.S., where he earned degrees from Columbia University.
Ref: Charlie Munger Gave His Family Fortune To 'Chinese Warren Buffett' – He Flipped It Into $400 Million: 'Backed Up The Truck And Made A Killing (benzinga)
