📖Li Lu
Catalyst-Aware Stock Picking
Identify specific catalysts that will unlock value.
Look for investments where a specific catalyst will unlock value. Without a catalyst, even cheap stocks can remain undervalued indefinitely.
🏠 Everyday Analogy
📖 Core Interpretation
In Catalyst-Aware Stock Picking, Li Lu focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Catalysts transform undervaluation into realized gains.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Post‑WTO China Value Plays (2003)
After China’s WTO entry, Li Lu analyzes undervalued Chinese companies listed in Hong Kong, focusing on durable business models, governance, and alignment with minority shareholders.
✨ Outcome：Deep research leads to concentrated positions that compound at high rates, forming the core of Himalaya Capital’s long‑term track record.
2
BYD Initial Investment (2002)
Li Lu studied Chinese battery maker BYD, leveraging his deep understanding of China and technology to judge its moat, management, and growth prospects within his circle of competence.
✨ Outcome：Invested early; BYD compounded massively over decades, becoming one of Berkshire-related circle-of-competence success stories.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →