📖Li Lu
Learn from Past Sells
Post-mortem every sell decision to improve.
After every sell, review the outcome. Did you sell too early, too late, or at the right time? Post-mortems on sell decisions improve future judgment.
🏠 Everyday Analogy
📖 Core Interpretation
Li Lu sees markets as cyclical rather than linear. Understanding cycle position improves risk-taking decisions more than trying to call exact tops and bottoms.
💎 Key Insight：Reviewing sell decisions sharpens future timing.
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❓ Why It Matters
Ignoring cycles repeats the same mistakes: excessive optimism at peaks and excessive pessimism near troughs. Context matters for position sizing.
🎯 How to Practice
Monitor credit, valuation, earnings, and sentiment signals; reduce aggressiveness in euphoric phases and preserve flexibility in fearful phases.
⚠️ Common Pitfalls
Treating short rebounds as full cycle turns
Extrapolating peak conditions indefinitely
Becoming maximally defensive near valuation troughs
📚 Case Studies
1
Investment in BYD (1999)
Li Lu analyzed BYD’s technological and cost advantages in batteries and autos, seeing a durable moat in engineering talent and vertical integration.
✨ Outcome：Backed BYD early; Berkshire Hathaway later invested, and BYD became a multibagger over the following decade.
2
Post‑SARS Chinese Banks Review (2003)
Li Lu studied major Chinese banks after SARS, focusing on their deposit franchises, regulatory protection, and scale advantages as moat characteristics.
✨ Outcome：Selected top institutions with strong moats and avoided weaker lenders, resulting in superior long‑term returns versus the Chinese financial sector.
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