Comments on Distressed Debt Investing: Li Lu's Foreword to Poor Charlie's Almanac

I like Li Lu's chances of succeeding Buffett a...

2010-07-13T00:44:17.073-04:00

I like Li Lu's chances of succeeding Buffett as Berkshire's CIO. If Greenwald's quote is accurate that Li is managing all of Munger's money, then it's a small leap to see him managing all of Buffett's money too.

Hunter -- I also read Li Lu's columbia speech ...

2010-06-28T15:32:24.724-04:00

Hunter -- I also read Li Lu's columbia speech and picked out the quote about evaluating businesses as one of the best take aways from the article. Additionally, I thought this excerpt to be the essence of investment analysis:

"The key to analyzing it is you have to ask: do I really know what I think I know, do I really know what I don’t know? If you can’t answer that question, chances are you are gambling."

Al, I think that Charlie Munger knows how to pick ...

2010-06-28T11:39:29.553-04:00

Al, I think that Charlie Munger knows how to pick a true investor from a pretender.

I'm curious about the sourcing of Greenwald...

2010-06-27T23:55:08.146-04:00

I'm curious about the sourcing of Greenwald's Klarman/Alexander/Lu quote. Did he hear this directly, or is he inferring it from Munger's enthusiasm? There was an interesting moment in the last Berkshire AGM where Munger mentioned that a manager had achieved 200% results without leverage, and Buffett conspicuously refused to comment.

I would suggest caution regarding Li Lu's nominal results given the lack of available information concerning his actual, as opposed to expressed, methodology. Seth Klarman proved to capital preservation with an entire decade of nominal underperformance achieved through a proselyte's commitment to margins of safety.

Much of what Lu says sounds very good, but there are plenty pretenders who, after 47 years of Berkshire Hathaway, know exactly what to say.