In the early 2000s, Berkshire Hathaway Vice Chairman Charlie Munger made a bold and calculated financial move. He entrusted a significant portion of his family's fortune ($88 million) to Li Lu, also known as China's Warren Buffett.
This bold investment was risky, but it not only kept us safe, but also delivered significant growth. Currently, that amount is estimated at approximately $400 million.
“We've had very good profits for a long time,” Munger said. “That $88 million has grown four to five times.”
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The two first met at a mutual friend's house in Los Angeles shortly after Lee graduated from college. At first, Munger seemed a little reserved and lost in thought, rather than fully engrossed in the conversation. Despite this first impression, their talk was imbued with Munger's simple yet deeply insightful words of wisdom.
Seven years later, over Thanksgiving lunch in 2003, Munger and Lee had what they described as a “long heart-to-heart conversation.” Mr. Munger was impressed by Mr. Lee's excellence in the investment field and supported him with his personal funds in 2004 when Mr. Lee embarked on a new fund business.
Li's investment track record includes notable investments, including Guizhou Moutai, a liquor brand that has soared in value over the past 20 years and ranks among China's largest listed companies. It is also called China's national drink.
Despite being in the midst of a pandemic, Guizhou Moutai had a great year. In 2020, the company's stock price on the Shanghai Stock Exchange rose by about 70%. The company, part government-owned and part publicly traded, is China's most valuable company outside the high-tech sector. It's worth more than the four big banks in this country.
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Mr. Munger praised Mr. Lee's wise decision-making, saying, “The income was four to five times as much, and Mr. Li Lu just backed up his truck and bought as much as he could and made a lot of money.'' '' he pointed out.
Mr. Lee's investment strategy relies on his knack for identifying undervalued prospects. This approach emphasizes that in some cases, non-traditional investments have the potential for significant growth. Mr. Lee's ability to recognize opportunities when companies are undervalued has enabled him to unlock extraordinary value over time.
Mr. Lee's most famous investment was in BYD Co. Ltd., a battery and electric vehicle maker. Mr. Lee first invested in BYD in 2002, a move that laid the groundwork for Mr. Buffett and Mr. Munger to follow six years later.
Munger acknowledged the extraordinary success and described BYD's initial investment as a “miracle.” In an interview with CNBC, he said BYD is outperforming Tesla in China, a statement that contrasts with Buffett's views on the electric vehicle industry. Buffett has expressed concern about excessive competition.
Mr. Munger considers Mr. Lee to be the only outsider he has ever entrusted with finance, and while he has great trust in Mr. Lee, he also predicts that Mr. Lee will eventually play a key role at Berkshire Hathaway. did.
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Original story can be found here.
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The article says Charlie Munger transferred his family's fortune to a “Chinese Warren Buffett” and turned it into $500 million — “We made very good profits for a long time.” Originally published on Benzinga.com
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