Published: 2024-06-03

Li Lu's Columbia 2006 Lecture

Li Lu, Columbia Business 2006 - Greenwald

What distinguishes value investing investors from other people?
It is whether you consider yourself the owner of the business.

Benjamin Graham taught three things

A. You must think of yourself as the owner of the business, not a mere scrap of paper.
B. Demand a high margin of safety
C. You must think differently from others. Independent thinking from Mr. Market

Because you cannot control the actual business with a very small stake, you demand an extremely high margin of safety to guard against this. If you develop a sense of ownership of the business, you will stop caring much about trading.

But if I think I own the business, why would I need the stock market? The stock market was not created for such people. Such people account for only 5% of the total, and 95% of people are not like that. The stock market is for them.

Even after seeing the success of Charlie Munger and Warren Buffett, 95% of people do not try to practice value investing. They see stocks only as a means for short-term trading. First, you must know whether you belong to the 5% or the remaining 95%.

To become a value investor

Be comfortable remaining in the minority
People in the 5% are very comfortable even when they are in the minority. But human nature is not like that. Throughout the process of human evolution, we have been made to keep belonging to the majority. It is engraved in our genes. Because, in the continued process of evolution, only those who belonged to the majority kept surviving. Therefore, you must be at ease with being in the minority. You must be at ease not because people agree with you, but because of the evidence you have found.
Be an investigative reporter, not a professional investor
You must have unceasing curiosity about everything. The more you know, the better an investor you can become. You must take an interest in everything—politics, economics, society, culture, and history. Occasionally you can gain insights through such learning. These insights can become enormous opportunities.

Topics: Li Lu
Source: Link
Category: Scrap/Video

Li Lu's Columbia 2006 Lecture

Li Lu, Columbia Business 2006 - Greenwald

What distinguishes value investing investors from other people?
It is whether you consider yourself the owner of the business.

Benjamin Graham taught three things

To become a value investor

Be comfortable remaining in the minority
People in the 5% are very comfortable even when they are in the minority. But human nature is not like that. Throughout the process of human evolution, we have been made to keep belonging to the majority. It is engraved in our genes. Because, in the continued process of evolution, only those who belonged to the majority kept surviving. Therefore, you must be at ease with being in the minority. You must be at ease not because people agree with you, but because of the evidence you have found.

Be an investigative reporter, not a professional investor
You must have unceasing curiosity about everything. The more you know, the better an investor you can become. You must take an interest in everything—politics, economics, society, culture, and history. Occasionally you can gain insights through such learning. These insights can become enormous opportunities.

Topics: Li Lu
Source: Link
Category: Scrap/Video