Li Lu Lecture

Question 1

How to develop frame of mind to deal with thoughtful people disagreeing with you?

Answer 1

Munger: I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.

Question 2

Why you should never think in terms of per share figure?

Answer 2

1st rule of investing: A stock represents partial ownership in a business. Think like a business owner not stock owner.

Question 3

What are three rules of investing?

Answer 3

1 - Stock represent partial ownership in a business
2 - Investing demands margin of safety
3 - Concept of Mr. Market as irrational and erratic.

Question 4

Why was Megastudy listed so cheap?

Answer 4

Market thought Government free online tutoring service would destroy Megastudy.

Question 5

Why Government’s service couldn’t destroy Megastudy

Answer 5

Good tutors give an edge. Good tutors cost more. Megastudy could attract good tutors with more students. Good tutor cost per student is less. Students willing to give a little fee to gain an edge over others.

Question 6

Which countries does Li Lu invest in?

Answer 6

I don’t focus on where the company is listed. Only three concepts of value investing.

Question 7

What three things does Li Lu focus on while looking at a business?

Answer 7

Do I understand it?
Is it a good business