#1
Margin of Safety
"Always demand a margin of safety. Pay less than intrinsic value to protect against errors."
Always demand margin of safety by buying below intrinsic value.
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Li Lu🛡 Margin of Safety
Li Lu's Margin of Safety Rules
Li Lu (born April 6, 1966) is a Chinese-American investor and founder of Himalaya Capital Management. He is one of the few fund managers to have Charlie Munger as a personal investor, and Munger has called him one of the finest investors he has ever known. Born in China during the Cultural Revolution, Li Lu was a student leader during...
3 principles·Margin of Safety
3 Key Margin of Safety Principles
#2
Market as Your Servant
"The market exists to serve you, not to guide you. Use market prices to your advantage — buy when the market offers bargains and sell when it offers premiums."
Use the market as your servant, not your guide.
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Market Cycles Awareness
"Markets move in cycles driven by human emotion. Understanding where you are in the cycle helps you prepare for what comes next and position accordingly."
Understand where you are in the market cycle.
Read Full Analysis →Frequently Asked Questions
What are Li Lu's key margin of safety principles?
Li Lu has 3 key principles on margin of safety. The most important one is "Margin of Safety" — Always demand a margin of safety.
How does Li Lu apply margin of safety in practice?
Li Lu applies margin of safety through several key principles including "Margin of Safety" and "Market as Your Servant". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Li Lu's approach to margin of safety unique?
Li Lu's approach to margin of safety is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Li Lu provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
