CCBC Fireside Chat on Value Investing in China

Live streaming from Columbia Business School. Welcome to the 13th Columbia China Business Conference. Joining us today are Professor Bruce Greenwald and Mr. Lee Liu.

I've known Lee Liu for more than 20 years. How has your investment philosophy evolved? In what ways has Charlie Munger influenced you?

Before I got exposed to value investing through Buffett's lecture at Bruce's class, my whole approach was along similar lines.

What specifically do you look for in a great business? What are the characteristics that make a business truly outstanding?

Great businesses are the ones who really have above average return on invested capital - but that kind of businesses socially attract imitators.

The highest form which civilization can reach is a seamless web of deserved trust - not much procedure, just totally reliable people correctly trusting one another.

All great businesses are in constant change. The moat must be continuously rebuilt to remain relevant.

How do you invest differently from other value investors?

I evolved from not understanding business at all, just looking at financial statements, to deeply understanding management.

I use DCF as the primary tool, but the key is being conservative with assumptions.

Do you think investors should be generalists or specialists?

China has been the most dynamic economy in the world for the last 30 years, transitioning from investment-driven to consumption-driven economy.

Housing, services, virtually every industry is in a robust growth stage. The challenge in China is not finding opportunities.

What opportunities do you see in China's service economy?

Looking back on your career, what are some of your biggest investment mistakes?

Mistakes are a necessary part of investing. The key is learning from them quickly.

The center of the global economy is shifting from the Atlantic to the Pacific.