Collection: Li Lu - #22 'Timberland Co. Part 4 (FINAL), Questions & Answers'



[Transcript]

BRUCE GREENWALD 00:00

Did you worry about what happened between 1994 and 1996, in particular – (BROKEN AUDIO) –


LI LU 00:07

Yes, because thats really when the lawsuit occurred – (Laughs) – they did have a period of time –


BRUCE GREENWALD 00:14

What happened then?


LI LU 00:15

Well, they do have a misstep at that point because their product wasn't right, and they build their business really on reputation of this kind of waterproof, that they’re the first guy would really come up with this concept of waterproof.


And so they did, you know, sort of mix – they send mixed signals of both waterproof shoes and non waterproof shoes. And in marketing that was a mistake, it was a mistake and it confused the market, and it confused the integrity of their claim and they suffered.


But even with that year the revenue pretty much has still gone up. I mean they have a one year of a blemish, most of the time they have executed their business quite brilliantly.


Yes?


AUDIENCE MEMBER 01:04

When you have a personal relationship with the son of the company. Does that trigger the insider trading?


LI LU 01:13

It does, that's why I didn't really buy anything afterwards. You don't have to. You already bought everything at 28. You know, when they go up, you just have to sit your ass on it. Don't have to do a damn thing.


That’s a good thing about really buying a good business, the business take care of itself. I mean as Chase (student) said, you're riding up and down with the strength of the business.


And it – yes?


AUDIENCE MEMBER 01:41

How much time you spend on doing your due diligence before you even buy it?


LI LU 01:46

Actually, no more than a couple of weeks. I mean, all of those surprisingly doesn't take all that long. But when the things happens, you just have to really devote day and night into it. Day and night into it. And that's why I’m glad that my wife is actually here so that she know all that missing nights what I was doing. (Laughter)


You know, the opportunity like that don't come very often. So when it comes, you have to seize it, you have to do everything complete, but you have to do it fast. And that's why you have to train yourself all those time and you don't have to do a damn thing, put things into banks, that’s okay. You don't have to buy anything.


But when opportunity comes, you have to jump on it. And that's what I did. When you finish all of the things, it doesn't take all that long but you take intensive work for a short period of time.


Yes?


AUDIENCE MEMBER 02:38

Do you normally find things on screen or do you use others?


LI LU 02:41

Well, I like to read that one mostly because is in itself is a good activity. I don't have to find anything, I learned. And I’m curious about all businesses and that’s why when the opportunity come, within a few second, you can tell, you can smell it.


How can you really develop that smell? The only way to do that is just reading page after page. And Value Line is particularly good because it really puts, you know, all sorts of a different data and all sorts of years. Not just one year. And so that's the easiest way for you to really learn a whole bunch of different businesses.


Yes?


AUDIENCE MEMBER 03:24

So what percentage of your funds did you put in it? (Laughter)


LI LU 03:28

I would really keep that confidential, but a shitload of funds. (Laughter)


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

 

[YAPSS Takeaway]

You got to train yourself about businesses and while you are training and learning, it's okay to put money into banks and not buy anything. But when opportunity come, you have to jump on it and seize it fast.