He gave $88m to this man

This morning, I was reading Li Lu‘s book, and I came across a powerful illustration of how trust is built.

In Li Lu’s book, he detailedly talked about the encounters with Charlie Munger in his life. He first met Charlie in 1996, but he only managed to have a chance to have a heartfelt talk with Charlie after 7 years, and coincidentally, that day fell on Thanks Giving Day in 2003.

He said in his book: “We had a long and heartfelt talk. I introduced Charlie to all the companies I invested in, the companies I had researched, and the companies that interested me, and he commented on them one by one.

I also asked him for advice on the troubles I was having. In the end, he told me that the problems I was facing were almost all the problems on Wall Street. The whole way of thinking on Wall Street is wrong. Although Berkshire has been so successful, there is no company on Wall Street that truly imitates it. If I continue to go on like this, my troubles will never go away.

But if I am willing to give up my current path and take a different path from Wall Street, he is willing to invest in me. This surprised me.”

From the above encounter, we can tell how generous Charlie was as a person. He spent hours with a young investor, generously commenting each on his stock thought process.

He loved teaching and gave Lilu guidance and inspired him to go against the norm of Wall Street, which is famous for its shortsighted trading activities.

Most importantly, he trusted Lilu as a person, and is willing to invest his money in him after only a few hours of conversation. In fact, Munger entrusted a significant portion of his family's fortune — $88 million — to Li Lu.

While the conversation itself might seem brief, it's clear Munger had observed Li Lu's character for the preceding seven years. Those few hours of deep discussion solidified Munger's trust in Li Lu.

This trust has paid off handsomely. Li Lu, the "Chinese Warren Buffett," has grown Munger's investment to roughly $400 million. More importantly, a bond of trust has formed, creating a worthy disciple to carry forward Charlie Munger's wisdom.

I want to thanks Li Lu for translating Poor Charlie’s Almanack to Chinese, so more people can learn from Charlie’s wisdom. I also hope my little effort to translate snippets of Li Lu’s wisdom can help you to become a better investor too overtime!

If you want to learn directly from Li Lu, the best way is to read his book. It only has the Chinese version, but I’m very sure you will get immense wisdom from it!

Chloe Lin
Arigato Investor