2 Things I Always Tell My Analyst - Li Lu | CBS 2006【C:L.L Ep.26】

[Transcript]

LI LU: Okay so, if you're an analyst.

Okay, I always tell my analyst, I only need two things from you. If you want to be analyst – you need to be an analyst, of course, before you become a good investor – you want to provide accurate and complete information.

Accurate and complete. Most people fail on both scores, big time. And you just have to go to that extra length in order to get it done. If you can't succeed on that one then you can't success in this business, because most of the time you're going to stand alone, basically against just about everybody else.

And if you're not really confident about what you know and you're confident about your prediction what other people know and don't know. You can't possibly be putting that kind of a money when things go into a free fall. When it looks like you're really losing all your money, when everybody else is laughing at you, all the smart guys. So you must be able to first to do accurate and complete.

And the second thing in this business okay?

Most money are not made on those stocks that I was just talking about. The biggest amount of money you're ever gonna make is not from that. Those are the things that really get your bread and get your basic business going, and give you the basic returns. They do not provide you outsized return, even if both stocks went up five six times. They do not give you the outsized returns.

If you’re a value investor in a truest sense – okay, so there are two schools;

I mean you can do the Tweedy Browne, you can do the Ben Graham or you can do the Buffett and Munger type which is more kind of what I interested in. If you want to be that one, your return is going to come from a handful, no more than the number on your two hands.

Your entire life of maybe 50 years, of tremendous insight – tremendous insight you're going to gain that no other people have. How do you really build that insight?

There’s no other way other than basically continuous curiosity, intense curiosity, continuous study for your whole life. Anything that works.

(Source: https://youtu.be/y3c2PKupiu8)

[YAPSS Takeaway]