Why does Li Lu succeed so mightily? Well partly he’s sort of a Chinese Warren Buffet. That really helps. And partly he’s fishing in China! Not in thisover-searched, over-populated, highly competitive American market, and there’s still pockets of ignorance and lassitude in China that gave him so unusual opportunities. The first rule in fishing has always been fish where the fishare. And the second rule of fishing has always been ‘Don’t forget rule numberone’. And Li Lu just went where the fishing was good and the rest of us arelike cod fishermen who are trying to catch cod where the fish have been fished out. It doesn’t matter how much you work, when there’s that much competition.
What did you see in Li Lu versus other investors in China? Because in his biography it looks like he’smore of an outsider. And how similar or different is he versus Todd Combs andTed Weschler? And Is there any reason why you gave that interview last yearwith Li Lu in China?
I did it because he asked me and I sometimes do that, I am foolish that way. And I said what I believed when they asked me the questions. The answer is Li Lu is not a normal…He’s the Chinese Warren Buffet. He’s very talented. Of course I’ve enjoyed bagging him, but it’s interesting that way…I’m ninety five years…I’ve given Munger money to some outsider to run once in ninety five years. And it’s Li Lu, and of course he’s hit it out of the park. It’s very remarkable but it’salso pretty picky. And of course once I’ve got Li Lu if I’m comparing to him,who else am I going to pick? And by the way that’s a good way to make decisions and that’s what we do. If we’ve got one thing we can do more of, we’re notinterested in anything that’s not better than that. That simplifies life agreat deal because there aren’t that many people better than Li Lu. So I justsit. It’s amazing how intelligent it is to spend some time just sitting. A lot of people are way too active.
A lot of people ask how you determine what investment or deal to do, and you tell people that you can do this fairly quickly. My question is how do you tell if a money manager ormanagement of a company has the right character or the right integrity? How long does it take you to do that and what are some traits that you look for?
I found Li Lu I don’tlook for anybody else. So I’m the wrong person. What are my chances I’m goingto get somebody better than Li Lu. So it’s very easy for me. What you need is aLi Lu and I don’t know how to get you one.