Links

Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’ (LINK)

"The Practice of Value Investing" by Li Lu (November 2019 speech, translated) (LINK)

Has This California Lab Fixed America’s Covid Test Problem? - by Michael Lewis (LINK)

Who Pays For This? - by Morgan Housel (LINK)

Rob Arnott: Why the Stock Market Hasn't Even Gotten Cheap Yet (video) (LINK)

The NBA and Microsoft - by Ben Thompson (LINK)

Mohnish Pabrai and Francis Chou Q&A with Harvard class (podcast) (LINK)

Value Investing with Legends Podcast: Dan Davidowits & Jeff Mueller – Compounding with Polen Capital (LINK)

MacroVoices Podcast #215 - Chris Cole: Dragon portfolio revisited in the eye of the storm (LINK)

Related paper: "The Allegory of the Hawk and the Serpent"

The Peter Attia Drive Podcast: #107 - John Barry: 1918 Spanish flu pandemic—historical account, parallels to today, and lessons (LINK)

Related book: The Great Influenza: The Story of the Deadliest Pandemic in History

Links

"In the main, therefore, slumps are experiences to be lived through and survived with as much equanimity and patience as possible. Advantage can be taken of them more because individual securities fall out of their reasonable parity with other securities on such occasions, than by attempts at wholesale shifts into and out of equities as a whole. One must not allow one’s attitude to securities which have a daily market quotation to be disturbed by this fact." --John Maynard Keynes

Gates to Leave Boards of Microsoft, Berkshire Hathaway (LINK)

Microsoft Corp. co-founder Bill Gates is stepping down from the company’s board of directors, marking the biggest boardroom departure in the tech industry since the death of longtime rival and Apple Inc. co-founder Steve Jobs. 

Mr. Gates, who also is vacating his board seat at Berkshire Hathaway Inc., intends to focus more on his philanthropic efforts. He will continue to serve as a technical adviser to Microsoft Chief Executive Satya Nadella, the software company said late Friday.

Coronavirus and Insurance Policies: What Is Covered? ($) (LINK)

Stocks Are in Chaos. Control the One Thing You Can. - by Jason Zweig ($) (LINK)

Remember: You Don’t Control What Happens, You Control How You Respond - by Ryan Holiday (LINK)

Himalaya Capital Hosts Discussion on COVID-19 with Experts from China (video) [H/T @ShaiDardashti] (LINK)

Li Lu, Founder and Chairman of Himalaya Capital, hosted a video conference on March 13th, 2020 between three leading COVID-19 experts from China to share their valuable experiences fighting the virus on the frontlines over the past two months with leading scientists, health practitioners, and policy makers in the United States.

How A Country Serious About Coronavirus Does Testing And Quarantine (video) (LINK)

Inside the Rope with David Clark (podcast): 59: John Hempton - Central Banks aren’t the answer to Coronavirus (LINK)

Hidden Forces Podcast: Passive Investing’s Role in the Coronavirus Market Melt-Down & Prospects for a Melt-Up | Mike Green (LINK)

The Peter Attia Drive Podcast: #97 - Peter Hotez, M.D., Ph.D.: COVID-19: transmissibility, vaccines, risk reduction, and treatment (LINK)

The Peter Attia Drive Podcast: #98 - Peter Attia, M.D. and Paul Grewal, M.D.: Coronavirus (COVID-19) FAQ (LINK)

The Man Who Saw the Pandemic Coming (LINK)

Links

"There's no such thing as a value company. Price is all that matters. At some price, an asset is a buy, at another it's a hold, and at another it's a sell." --Seth Klarman

Buffett Lieutenant to Head Berkshire Hathaway’s Geico Insurance Unit ($) (LINK)

Todd Combs to succeed Bill Roberts, who will retire at the end of 2020

In his 2019 Annual Book Review [Chinese], Li Lu recommends The Other Half of Macroeconomics and the Fate of Globalization. [H/T @mastersinvest] 

Is China Beating America to AI Supremacy? - by Graham Allison (LINK)

Amazon Advertising, Explained (LINK)

Banks Own Thousands of Railcars but Don't Know What to Do With Them ($) (LINK)

A Sea Change in Fuel Prices Is Imminent ($) (LINK)

January’s deadline to use cleaner marine fuel could ripple through the global fuel market on land and sea

Martin Stopford at the 2019 Hong Kong Maritime Forum - Where We Are in the Shipping Cycle Today (video) (LINK)

Related book: Maritime Economics - by Martin Stopford

Hyman Minsky explains financial fragility in his own words (November 1987 video) [H/T Ritholtz] (LINK)

We’ve just had the best decade in human history. Seriously - by Matt Ridley (LINK)

Grant’s Current Yield Podcast: Winter reading (LINK)

Related book: Great Society: A New History - by Amity Shlaes

Wall Street Unplugged Podcast: The best value ideas for 2020 [with Jonathan Boyar] (LINK)

The Tim Ferriss Show (podcast): #403: Tony Fadell — On Building the iPod, iPhone, Nest, and a Life of Curiosity (LINK)

The Knowledge Project Podcast: #72 Neil Pasricha: Happy Habits (LINK)

How a 35,000-Year-Old Frozen Woolly Mammoth Tastes (LINK)

Why You Never Have Time - by Derek Thompson (LINK)

The Two Kinds of Moderate - by Paul Graham (LINK)

Fashionable Problems - by Paul Graham (LINK)

Links

"It’s not what you buy that determines your results, it’s what you pay for it." --Howard Marks (Mastering the Market Cycle)

Crypto Pioneer Pays $4.57 Million for Lunch With Warren Buffett (LINK)

The Couple Who Feds Say Scammed Berkshire Hathaway for Millions (LINK)

Apple’s Audacity - by Ben Thompson (LINK)

The controversy over WeWork’s $47 billion valuation and impending IPO, explained (LINK)

Stanley Druckenmiller at The Economic Club of New York (video) (LINK)

The Absolute Return Letter - June 2019: The Cost of Rising Populism (LINK)

A ‘Bridge’ to China, and Her Family’s Business, in the Trump Cabinet (LINK)

Elaine Chao has boosted the profile of her family’s shipping company, which benefits from industrial policies in China that are roiling the Trump administration.

A Massacre, Erased [H/T Linc] (LINK)

China tried to repress the memory of the brutal crackdown in Tiananmen Square. Thirty years later, Beijing is still terrified of its legacy.  

Related articles to the above: 1) In China, I'd Be Dead - by Li Lu (1989); 2) Drama of Li Lu's Life Recounted in Documentary Film (1995); Related book: Moving the Mountain: From the Cultural Revolution to Tiananmen Square - by Li Lu

The Peter Attia Drive Podcast: #56 - Jocko Willink (Part II of II) (LINK)

The Mutation Meant to Help the CRISPR Babies Could Be Harmful - by Sarah Zhang (LINK)

Science Friday Podcast: SciFri Extra: Remembering Murray Gell-Mann (LINK)

TED Talk: "Everything happens for a reason" -- and other lies I've loved | Kate Bowler (LINK)

Related book: Everything Happens for a Reason: And Other Lies I've Loved

Links

"Any asset class that has a big move, that’s based initially on fundamentals, is going to attract speculative participation at some point, and that speculative participation can become dominant as time goes by.... How far it goes, you never know. Some things go on to just unbelievable heights." --Warren Buffett (2006) 

Li Lu: Discussions about Modernization – Part Two: A Look at the Future of Sino-US Relations (December 2018) [H/T Linc] (LINK) [Part 1 was HERE.]

Mohnish Pabrai speaks at Trinity College Dublin - February 21, 2019 (video) (LINK)

Salesforce’s Success Rides on One Man’s Gut (LINK)

‘They Were Conned’: How Reckless Loans Devastated a Generation of Taxi Drivers (LINK)

Exponent Podcast: An Intra-west Debate (LINK)

The Wright Show: A Brief History of Doom (Robert Wright & Richard Vague) (LINK)

Related book: A Brief History of Doom: Two Hundred Years of Financial Crises

How China Sees Trump and the Rapidly Escalating Trade War (podcast) (LINK)

Evan Osnos joins Dorothy Wickenden to discuss the forces driving the first real economic and political test between the two superpowers of the twenty-first century. 

Five Good Questions: Barbara Tversky – Mind in Motion (LINK)

Beyond the Hype of Lab-Grown Diamonds [H/T Abnormal Returns] (LINK)

Links

Part 3 of the Charlie Munger & Li Lu Interview [also added to yesterday's post] (LINK)

Li Lu's Discussion of Modernization (2014) (LINK)

Warren Buffett on CNBC (FULL VIDEO, Transcript)

oGoLead Leadership Podcast with David Novak: Tom Murphy, Chairman & CEO Emeritus of Capital Cities/ABC, Inc. (LINK)

Do You Really Save 15% with GEICO? (LINK)

As Sears Withers, Its Former Stores Fuel a New Fortune [H/T Linc] (LINK)

The Curse of the Rockefellers (LINK)

The Bottom-Up Economist Report: Second Quarter 2018 (LINK)

Mark Yusko's Q2 2018 Market Review and Outlook letter (LINK)

Argentina's central bank hikes rates to 60% as the currency collapses (LINK)

Crazy/Genius Podcast: Should We Dim the Skies to Save the World? (LINK)

American Innovations Podcast: Thinking Machines | Artificial Intelligence | 1 (LINK)

Carina’s star-spangled chaos - by Phil Plait  (LINK)

Book of the day: Turning Oil Into Salt: Energy Independence Through Fuel Choice

Charlie Munger & Li Lu Interview by Weekly in Stocks (Parts 1, 2 & 3)

Link to Part 1


Link to Part 2


Link to Part 3

Links

Rare Charlie Munger and Li Lu Interview - Part I [H/T Linc] (LINK)

Li Lu on Charlie Munger's Greatest Influence (LINK)

I’ve witnessed him recovering from such hard blows one by one. Yet throughout all these blows, I’ve never seen him being pessimistic or desperate. He’s never complained about those terrible blows either. His attitude towards them is to take them as graceful and competent as he can. He’s objective and rational in everything. 

There is a Chinese saying that goes, "One should neither be pleased by external gains, nor be saddened by personal losses." Charlie is one of those people who can achieve such a state of mind.

Patreon Acquires Memberful, An Interview with Patreon CEO Jack Conte and Memberful CEO Drew Strojny (LINK)

Facebook’s Broken Censorship Machine - by Parker Thompson (LINK)

The Knowledge Project Podcast: Thinking in Algorithms (Ali Almossawi) (LINK)

Links

"First, define your own circle of competence with intellectual honesty. You have to know what you don’t know to determine what you know. Second, have the highest degree of fiduciary duty and imagine that every dollar you take from a client is coming from your own middle-class parents who are entrusting their life savings to you." --Li Lu

Chairman of Multibillion-Dollar Investment Firm Elected as New Caltech Trustee (LINK)

Li Lu, the founder and chairman of Himalaya Capital, a multibillion-dollar firm focused on long-term investments in Asia and the United States, has been elected to the Institute’s Board of Trustees.

Real World vs. Book Knowledge - by Morgan Housel (LINK)

Ideas and Institutions: A Growth Story - by Andrew Haldane (LINK)

A collection of Q2 investor letters (LINK)

Short-seller Jim Chanos breaks down his best investment ideas (video...Chanos starts around 11:18) [H/T Linc] (LINK)

The Oral History of Travel's Greatest Acquisition Booking.com (LINK)

One American’s quest to teach Italy — the motherland of espresso — how to do it better (LINK)

Lessons from Elad Gil and High Growth Handbook - by Tren Griffin (LINK)

Related book: High Growth Handbook

The Office-Messaging Wars Are Over. Slack Has Won. (LINK)

Rob Arnott on the Masters in Business Podcast (LINK)

The Jolly Swagmen Podcast: The Man Who Defied Europe - Yanis Varoufakis (LINK)

The Art of Manliness Podcast: The Daring Odyssey of Apollo 8 (LINK)

Related book: Rocket Men: The Daring Odyssey of Apollo 8 and the Astronauts Who Made Man's First Journey to the Moon - by Robert Kurson 

Leonardo Da Vinci’s To Do List (Circa 1490) (LINK)

Have we finally found liquid water on (well, under) Mars? Maaaaaaaybe. - by Phil Plait (LINK)

***

For Audible members, Audible's latest sale is Sci-Fi & Fantasy audiobooks for $4.95 [And if you're not a member, and haven't yet done a free trial, you can get a free trial and 2 free audiobook credits by signing up HERE.]. Some of the titles that stood out to me are below:

The Hitchhiker's Guide to the Galaxy

Snow Crash

The Hobbit

The Fellowship of the Ring

Brave New World

2001: A Space Odyssey

Links

5 Minutes Early Is On Time, On Time Is Late, And That's Ok - by Brent Beshore (LINK)

Brent's article reminded me of something Li Lu wrote about Charlie Munger back in 2010:

Charlie likes to meet people for breakfast, usually starting at 7:30 AM. I remember the first time I had breakfast with him. I arrived on time and found Charlie sitting there, finished with the day’s newspapers. It was only a few short minutes before 7:30, but I felt bad letting an older man I respected wait for me. For our second meeting, I arrived about fifteen minutes earlier and still found Charlie sitting there, reading the newspaper. For our third meeting, I arrived thirty minutes earlier and Charlie was still reading the newspaper, as if he had been waiting there all year round and had never left the seat. At the fourth meeting, I arrived an hour early and sat there waiting at 6:30 AM. At 6:45, Charlie strolled in with a pile of newspapers and sat down, not even looking up, completely unaware of my existence. Thereafter, I came to understand that Charlie always arrives early for meetings. However, he does not waste time either, because he reads the newspapers he brought along. Now I also arrive early, with a newspaper in hand, to keep him company until we start our breakfast meeting at 7:30 AM. 

Occasionally, Charlie may be late. Once I was to introduce a young Chinese entrepreneur to him, and Charlie ran half-an-hour late from another lunch meeting. The moment he arrived, Charlie apologized profusely for being late and explained in detail what had caused his delay. During the conversation, he even proposed a few methods to improve the valet parking system to be more efficient so as not to cause customer delays with a 45-minute waiting time. This young Chinese man was both surprised and touched as he could hardly imagine anyone in the world as well established and regarded as Charlie that would keep apologizing to a junior for being late.

“We All Wear All Black Every Day”: Inside Wall Street's Complex, Shameful, and Often Confidential Battle with #MeToo - by Bethany McLean (LINK)

Obvious Things That Easily Escape Attention - by Morgan Housel (LINK)

Bill Gates with another Reddit AMA (LINK)

How I Built This Podcast -- Jeni's Splendid Ice Creams: Jeni Britton Bauer (LINK)

Why is Nigeria Experiencing a Record-High Outbreak of Lassa Fever? - by  Ed Yong (LINK)

Links

"That's how history unfolds. People weave a web of meaning, believe in it with all their heart, but sooner or later the web unravels, and when we look back we cannot understand how anybody could have taken it seriously." -Yuval Noah Harari (Homo Deus) [Related previous post: Harari on hindsight...]

Li Lu: The Prospects for Value Investing in China (2015 talk) [H/T @CataumetCap] (LINK)

Giverny Capital 2016 Annual Letter to Partners [H/T ValueWalk] (LINK)

From Bonds To Equities, Howard Marks And Joel Greenblatt Preach The Gospel Of Patience (LINK)

Howard Marks on CNBC (video) (LINK)

Joel Greenblatt on CNBC (video) (LINK)

FT Alphachat podcast: How economics has evolved since the crisis (LINK)

How a North Carolina trucker changed the transportation industry (LINK)

Links

‘James Bond of Philanthropy’ Gives Away the Last of His Fortune (LINK)

Related book: The Billionaire Who Wasn't: How Chuck Feeney Secretly Made and Gave Away a Fortune

One Man’s Quest to Change the Way We Die [H/T Tim Ferriss, who also interviewed B.J. Miller HERE.] (LINK)

How B.J. Miller, a doctor and triple amputee, used his own experience to pioneer a new model of palliative care at a small, quirky hospice in San Francisco.

The Two Types of Knowledge in the World - by Ben Carlson (LINK)

10 Qualities of Great Investors - by Vishal Khandelwal (LINK)

Five Good Questions for Martin Ford about his book Rise of the Robots (video) (LINK)

The Seven Stages Of Robot Replacement - by Kevin Kelly [H/T The Browser] (LINK)

Related book: The Inevitable

Exponent Podcast: Episode 099 — Fate Has a Sense of Irony (LINK)

Ben and James discuss Amazon Alexa and the history of operating systems

Tendrils of Mess in our Brains - by Sarah Perry (LINK)

Investing thought of the day:

"So how do you really understand and gain that great insight? Pick one business. Any business. And truly understand it. I tell my interns to work through this exercise – imagine a distant relative passes away and you find out that you have inherited 100% of a business they owned. What are you going to do about it? That is the mentality to take when looking at any business. I strongly encourage you to start and understand one business, inside out. That is better than any training possible. It does not have to be a great business, it could be any business. You need to be able to get a feel for how you would do as a 100% owner. If you can do that, you will have a tremendous leg up against the competition. Most people don’t take that first concept correctly and it is quite sad. People view it as a piece of paper and just trade because it is easy to trade. But if it was a business you inherited, you would not be trading. You would really seek out knowledge on how it should be run, how it works. If you start with that, you will eventually know how much that business is worth." -Li Lu (from back in 2010)

Links

Li Lu reflects on turning 50 [scroll down to number 3 in the link] (LINK)

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 took the long rest. For some reason, my heart told me otherwise. I just kept going. Half of the time, I wasn’t sure where I was heading. The other half I was probably taking the wrong turns. No matter. 

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 counter-productive to the journey I want to take; things like envy, resentment, hatred, jealousy, greed and self-pity. I certainly wasn’t 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 for their prey, or when I took a wrong turn, I was fortunate to be able to correct them quickly. Socrates was right, unexamined life is not worth living, certainly not living well. Every once in a while, I would sit down alone to figure out where I might be wrong. Sometimes, what is wrong today is what was right in the past. As circumstances change, so should we. In my experience, every five to ten years or so, I had to change so much of myself that at times it felt like almost a reinvention. I’ve been blessed with the faculties of rationality that help me to form the habit of self-examination. And when I fail in self-examination, I’m even more blessed to have some strong friends who can point out my blind spots. I would have been lost in life’s various mazes if I had not gotten that help.

Conversation With First Eagle’s Jean-Marie Eveillard And Matt McLennan (video) (LINK)

Volatility: In the Eye of the Beholder (LINK)

Apple's Organizational Crossroads - by Ben Thompson (LINK)

a16z Podcast (3/25/2016): Investing in (Business and Career) Change (LINK)

Most investors try to invest in things that don’t change and last forever — Warren Buffett for example loves Heinz ketchup! But VC is about investing in things that do change… a lot. How does this basic mindset challenge much of what people learn in business school or classic leadership training?  Do software-led businesses require different mindsets? What are some of the most common things first-time vs. serial entrepreneurs do? 

This Q&A — with Marc Andreessen interviewed by Don Faul (former U.S. Marine platoon commander and head of operations at Google, Facebook, Pinterest, and now COO at Athos) — covers these topics, as well as what to consider when working for a big- v. small- (and especially intermediate-) -sized company, what it takes to make a career transition, and how to “go back to kindergarten”.

Charlie Munger and circle of competence...

From Charlie Munger: The Complete Investor:

Munger has a range of approaches he uses to avoid mistakes. To make this point by analogy, Munger is fond of saying that he wants to know where he will die so he can intentionally never go there. His friend and investor Li Lu described one such approach:  

When Charlie thinks about things, he starts by inverting. To understand how to be happy in life Charlie will study how to make life miserable; to examine how a business becomes big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market. —LI LU, CHINA ENTREPRENEUR MAGAZINE, 2010 

By adopting this approach Munger is trying hard to limit his investing to areas in which he has a significant advantage in terms of competence and not just a basic understanding. To illustrate this point, he has in the past talked about a man who had “managed to corner the market in shoe buttons—a really small market, but he had it all.” It is possible to earn an attractive financial return in a very limited domain like shoe buttons, although that is an extreme example of a very narrow circle of competence. The areas in which you might have a circle of competence will hopefully be significantly larger than just shoe buttons. However, if you try to expand that circle of competence too far, it can have disastrous results. Li Lu has written about how Munger has described this point to him:  

The true insights a person can get in life are still very limited, so correct decision making must necessarily be confined to your “circle of competence.” A “competence” that has no defined borders cannot be called a true competence. —LI LU, CHINA ENTREPRENEUR MAGAZINE, 2010 

Once the borders of a circle of competence are established, the challenge is to remain inside those borders. Staying within a circle of competence is obviously not rocket science in theory, but it is hard for most people to do in practice. Lapses by investors are more likely to occur when they meet a slick promoter who is highly skilled at telling stories. This is a case where emotional intelligence, which is very different than intellectual intelligence, becomes critically important. Humans love stories because they cause them to suspend disbelief. Some of the biggest frauds in financial history, like Bernie Madoff and Ken Lay, were excellent storytellers. Stories cause people to suspend disbelief, and being in that state is harmful to any person’s investing process. 

Too many investors confuse familiarity with competence. For example, just because a person flies on airlines a lot does not mean that he or she understands the airline industry well enough to be competent as an investor in that sector of the economy. Using Facebook a lot does not make you qualified to invest in a social media startup. If you have not gone beyond simply using a product or service and have not taken a deep dive into the business of a company, you should not invest in that company. 

Among the people who know how to stay within their circle of competence are the chief executive officers of Berkshire subsidiaries. For example, Buffett once pointed to Rose Blumkin of Furniture Mart as a person who fully understands the dimensions of her capabilities: 

[If] you got about two inches outside the perimeter of her circle of competence, she didn’t even talk about it. She knew exactly what she was good at, and she had no desire to kid herself about those things. —WARREN BUFFETT, THE SNOWBALL, 2008

Li Lu on talking with management

From Tariq Ali’s Notes from Li Lu’s 2010 Lecture at Columbia

The key in investing is to know what you know and know what you don’t know. You can know about management teams without meeting with them. Every situation is slightly different. So I come back to the point that if you know enough on other things that there is enough margin of safety. Even if you meet with management, you may not learn something. Obviously, actions speak louder. You want to see what they have done. Everything being equal, the more you know about management, the more honest and upfront they are, the more motive they have, the better the situation is and the deeper the discount. You have to analyze it all. The key to analyzing it is you have to ask: Do I really know what I think I know? Do I really know what I don’t know? If you can’t answer that question, chances are you are gambling.

A few related quotes...

As I came across the Russo quote below again, I was reminded of a few others, so I thought I'd group them together. 

From Tom Russo:

…what I have observed about the really great investors is the simple decisions that they end up having to make by virtue of focusing on what’s important and what’s unknowable.

From Henry David Thoreau:

It’s not what you look at that matters, it’s what you see.

From Poor Charlie's Almanack: 

Don’t overlook the obvious by drowning in minutiae

From Li Lu's forward to the Chinese edition of Poor Charlie's Almanack:

...the true insights a person can get in life is still very limited, so correct decision-making must necessarily be confined to your "circle of competence". A “competence” that has no defined borders cannot be called a true competence. How do you define your own circle of competence? Charlie said, if I want to hold a view, if I cannot refute or disprove this view better than the smartest, most capable, most qualified person on Earth, then I’m not worthy of holding that view. So when Charlie truly holds a certain point of view, his thinking is not only original and unique, but also almost never wrong. 

A beautiful lady once insisted that Charlie use one word to sum up the source of his success, Charlie said it was being “rational.” However, he has a more stringent definition of rationality. It is this kind of “rationality” that grants him the sensitive and unique vision and insight. Even in a completely unfamiliar territory, with just one look he could see through to the essence of things. Buffett calls this characteristic of Charlie the “two-minute effect” -- he said Charlie can, in the shortest time possible, unravel the nature of a complex business and understand it better than anyone else can.

Links

Li Lu Adds 3 Mil Shares In BYD On The Day Of Stock Plunge (LINK)

On the day that the stock of Chinese electric cars company BYD took a sharp dip, one investor saw an opportunity to buy.

Himalaya Capital Investors, an investment vehicle controlled by Li Lu, added 3.2 million shares in BYD last Thursday, the day when the company’s share price mysteriously plunged nearly 30% on the Hong Kong Stock Exchange, according to the company’s latest filing.

LL Group, the parent company of Himalaya Capital Investors where Li Lu is the controlling shareholder, now holds 57.4 million shares, or about 2.4% of BYD’s total issued share capital.

The once rumored candidate to run a portion of Warren Buffett’s portfolio, Li is an early investor in BYD himself and later through a fund with investment from Charlie Munger, the vice chairman of Berkshire Hathaway.
...
BYD closed at HKD 27.85 on the Hong Kong Stock Exchange today, down 2.6% from opening. Li looks to have already made a paper profit from the additional shares, which were purchased at an average of HKD 23.54 per share.

Five Good Questions for Lawrence Cunningham (LINK)

Related books: Berkshire Beyond Buffett and How to Change the World: Social Entrepreneurs and the Power of New Ideas

Brain Pickings' 14 Best Books of 2014, including The Accidental Universe: The World You Thought You Knew and How We Got to Now: Six Innovations That Made the Modern World (LINK)

Tim Harford on the psychology of giving and receiving gifts [H/T The Browser] (LINK)

Related book: The Undercover Economist Strikes Back

Hussman Weekly Market Comment: Iceberg at the Starboard Bow (LINK)

Notably, the rather breathtaking short-squeeze we observed late last week was not accompanied by a material shift in internals or credit spreads. Understand that such improvement would not reduce the overvaluation of the market, but it would significantly reduce the immediacy of our downside concerns. Meanwhile, however, we interpret last week’s short-squeeze as more likely to be one of those “short-lived announcement effects.” Even here, despite enthusiasm over the word “patient,” the Fed announced no meaningful change of course.

Monetary easing is reliably supportive to risky assets only when safe, low-interest liquidity is viewed as an inferior asset. This can be inferred from the behavior of market internals and credit spreads. At present – again, aside from short-lived announcement effects – we don’t observe the conditions under which monetary easing should be expected to be particularly supportive to risky assets. While the current meme is that monetary easing is equivalent to rising stock prices, recall that the Fed was already aggressively lowering interest rates in the fall of 2007, and eased monetary policy aggressively and persistently through the entire course of the 55% stock market collapse that followed. 

..... 

Coupled with an increasingly synchronized global economic downturn, we’ve seen a particular collapse in oil prices. Some observers view this as if it is “stimulative” to the economy, but that perspective confuses the price decline resulting from an inward shift of the demand curve as if it was caused by an outward shift of supply. Our view is that the concerted decline in commodity prices, foreign currencies, and Treasury yields, coupled with a blowout of credit spreads in junk debt (particularly energy-related debt) is all consistent with weakening global economic prospects. Given the “cleanest dirty shirt” perception of the U.S. dollar, the greenback has certainly benefited from this dynamic. But to expect this benefit to persist assumes that a) the dispersion between U.S. and global prospects will continue to widen, and b) that widening is not already priced into the currency markets.

Li Lu on understanding a business…

Via notes from his 2010 lecture at Columbia:

You can’t truly understand everything about a business in 1 week. It took me 10 years and I am still learning new things about BYD. It is a continuous learning process. You could spend a lifetime studying a business or industry, but in a few seconds I can tell you whether or not I like it. You want to build [knowledge and continually learn]. There is not set preparation.

....................

His comment "but in a few seconds I can tell you whether or not I like it" reminded me of these posts:

Warren Buffett quote on filters

Alice Schroeder on Buffett’s filtering process

Graham and Doddsville Newsletter - Spring 2013

Featuring Li Lu, Paul Isaac, and Preston Athey.

Link to: Graham and Doddsville Newsletter - Spring 2013

Video of Li Lu’s Presentation at the FAME Student Investment Conference

Found via Santangel's Review.


Link to Part 1


Link to Part 2


Link to Part 3