Collection: Li Lu - #8 'Should You Specialize or Be a Generalist Investor?'



[Transcript]

BRUCE GREENWALD 00:00

Do you prefer to be a generalist or a specialist investor and would one work better in the Chinese market than another?


LI LU 00:11

Well, in a sense, you always want to be a generalist in terms of a student of businesses that you’re interested.


You know, you have to have – To be good at this game, you have to have the innate intensive curiosity about a business, all kinds of businesses. It doesn’t mean you’re going to really, really get to the bottom of it. Oftentimes, you don’t if you’re honest with yourself.


But by the time you really get into the companies you really decided to invest, you really better become a true specialist. And to the point you really know, hopefully better than anybody in the world you can find, including the top management team.


And the top management team, because they manage the company, they tend to be deeply personally vested in their own biases and may not be able to look at the business as objectively, rationally as you do. And so that’s really the test. So you want to be a true specialist in the company you chose to really invest.


You want to be a generalist always of business in general, so that your core competence, your circle of competence is constantly evolving and enlarging over time. If I still really – know what I knew when I started my first took your class or when you first invested with me, we would not really have anywhere near the results that we both enjoyed, so luckily we continue to expand and we continue to learn.


But on the other hand, it is fascinating to see that how business evolved over the last few decades will continue to evolve in the next few decades. And that really makes me feel that, boy, I am lucky to choose this field that I get paid to really satisfy my curiosity and to learn all those great people and great enterprises serving society. So I feel happy every day doing what I do.


(Source: https://youtu.be/FiHrWy2jGbA)

 

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