10 Lessons from Li Lu’s Newest Speech on Global Value Investing!
Li Lu—renowned investor, founder of Himalaya Capital, and one of the world’s prominent voices on value investing—recently delivered a lecture titled “Global Value Investing and Our Times.” And when Li Lu speak, the value investing community should listen.
It marked the third time in a decade that Li Lu has spoken to students of the “Value Investing” course at Peking University’s Guanghua School of Management. In this comprehensive speech, he explored a wide range of topics, and of course, shared insights into his philosophy on value investing.
Below, I summarize ten investing lessons you can learn from his talk:
Lesson 1: “Take the Macro as It Is”
One of Li Lu’s most recurring themes is that investors should neither ignore nor try to dominate macroeconomic forces—instead, they should accept them as the backdrop against which companies operate.
For instance, a rising labor cost environment could:
Diminish margins for companies that rely on cheap labor.
Drive automation and technology investment, benefiting certain sectors or firms.
Or if export dynamics shift due to trade tensions, a company with international exposure may face new tariffs or supply chain disruptions. Macro changes might not kill a strong business, but they can alter its profit trajectory or strategic focus.
He argues that obsessing over top-down factors (e.g., global trade tensions, recession forecasts, or interest-rate cycles) can trap investors in paralysis OR lead them to over-trade.
“Our fundamental attitude is: the macro environment is an objective reality; we can only accept it. The micro level is where we can actually do something. This is the basic stance of a value investor. The world is objective and will not change because of our wishes or subjective judgments.”
Rather than forecast every twist in the economy, Li Lu highlights that value investors should study the underlying fundamentals of the businesses they own.
Acknowledging that companies do not exist in a vacuum, he emphasizes how awareness of broader trends can be helpful—just not to the point of becoming the primary driver of one’s investment decisions:
“Value investing, no matter where it is practiced, is inevitably tied to its era. While in principle it emphasizes bottom-up analysis, the companies we invest in unavoidably operate within a specific period and face macro influences. We cannot escape the time in which we live.”
Thus, while macro conditions matter for context—like understanding consumer sentiment, secular growth tail- or headwinds, or trade policy shifts—the investor’s main energy should still be devoted to identifying mispricing at the micro (company) level.
As Li Lu puts it:
“Our investment is about taking the world as it is… and then acting on specific companies where we have real insight.”
Li Lu’s advice:
Map Macro Trends: Keep track of major policy changes, demographic shifts, or global trade realignments.
Assess Impact on Your Companies: Does the shift threaten their advantage, or does it open new market opportunities?
Stick to Fundamentals: Avoid letting macro narratives blind you to a company’s deeper strengths (or flaws).