Bold moves can make or break your career in investing, and the late Charlie Munger, Vice Chairman of Berkshire Hathaway Inc., knew this all too well. In the early 2000s, he entrusted $88 million of his family’s fortune to Li Lu, a man often dubbed the “Chinese Warren Buffett.”
The investment not only safeguarded Munger’s capital but multiplied it significantly, with current estimates valuing it at around $400 million. Munger said in September 2023, "We made unholy good returns for a long, long time. That $88 million has become four or five times that."
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Munger’s impressive returns were not a stroke of luck but the result of his deep trust in Li’s acumen. Their relationship began at a mutual friend’s gathering in Los Angeles right after Li graduated from college. Although Munger was initially reserved, their conversation soon deepened, culminating in a pivotal, in-depth discussion over a Thanksgiving lunch in 2003. It was then that Munger recognized Li’s potential in the investment world.
Impressed by Li’s savvy and strategic insights, Munger decided to back him personally when Li launched a new fund in 2004. Li’s investment prowess became evident through his outstanding picks, including Kweichow Moutai, a premium liquor brand whose value has skyrocketed, making it one of China’s most significant public companies today. Munger praised Li’s ability to spot undervalued assets, remarking on the purchase of Kweichow Moutai, “It was real cheap, four to five times earnings, and Li Lu just backed up the truck, bought all he could and made a killing.”
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Li’s knack for identifying lucrative opportunities didn’t stop with alcoholic beverages. He also saw potential in BYD, a battery and electric vehicle manufacturer. His early investment in 2002 set the stage for Munger and Buffett to take notice and invest in BYD themselves four years later, a move Munger describes as a “minor miracle.”
Big bets can make or break your financial future. That’s why savvy investors like Munger don't go it alone. A skilled financial adviser can be your secret weapon. They’ll translate market complexities into clear strategies, tailor them to your risk appetite and goals and help you navigate the twists and turns to maximize your returns.
To ensure you are making the most informed decisions possible, consider consulting a financial adviser who can offer personalized insights and guidance suited to your unique financial situation.
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