'Value' by Zhang Lei
Zhang Lei, the founder of Hillhouse capital, is one of the best investors in China. Hillhouse has started with 20 million AUM in 2005 and has quickly grown to 30 billion in 2017. Here are some of the lessons that I have learnt from ‘Value’, by Zhang Lei. 👇
Zhang Lei, the founder of Hillhouse capital, is one of the best investors in China. Hillhouse has started with 20 million AUM in 2005 and has quickly grown to 30 billion in 2017. Here are some of the lessons that I have learnt from ‘Value’, by Zhang Lei. 👇
1. Investing is not simply about crunching numbers or logical reasoning. As an investor, you should conduct ‘real life research’ to experience the ‘real world’. Such experience will teach you what the consumers really wants and what kind of services are truly wanted.
2. The best analysis is done through the persistence of ‘first principle thinking’ rather than valuation, pricing, or portfolio theories. Be sure to always go back to the basics and asks fundamental questions when you are analysing a company.
3. As an investor, on top of having financial knowledge, you should learn about history, current events, and psychology. Always strive to know a bit on every subject because investing is not just about finance. Investing is about everything in the world.
4. Never be contempt as an Investor. If an investor becomes lazy, loses the passion to learn about the truth, and stops sharpening his/her ability to understand, the investor is starting his/her journey to failure.
5. Education is the most important and smartest investment of life.
6. Focus on learning and challenging yourself constantly. Learning and investing should be a lifelong pleasure and accomplishment.
7. If a company ‘continuously and crazily’ creates value for the society, the revenue and profit for the company will come sooner or later. Focus on the value creation rather than revenue or profit. With such mindset, you may find the long-term big winners.
8. There is only one moat in the world. A company has that moat if the company continuously innovate and create long term value for the society. Once the company stops, it does not have a moat.
9. You should practice ‘delay gratification’ over ‘instant gratification’. With the mindset of ‘delay gratification’, you are already ahead of the game as a long-term investor.
10. As a long-term investor, you need to articulate clearly about the answers to long-term fundamental questions. If you do not have these answers, it will be very hard for you to endure the challenge of time.
11. Long term thinking will make time, a friend of yours.
12. Use the investing style and invest in the companies that makes you feel happy. Investing should be happy, do not allow others to dictate what investing should be like to you.
13. Last but not least, one of the most important things in life is to find a bunch of people that you like and are reliable to do meaningful things together. Chase your dreams with them. END//
14. I hope you enjoyed this short thread on the things I have learnt from ‘Value’ by Zhang Lei. I highly recommend you to read the book if you can read Chinese. Very unfortunately, it does not have an English version 🥲
15. If you know Zhang Lei, what are some of the biggest takeaways or lessons that you have learnt from him? Be sure to tell us what you think about Zhang Lei!
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