Himalaya Capital

1/3/2022 TO: Investors of Himalaya Capital FROM: Li Lu RE: Discipline in Action When you run across something that fascinates you, be disciplined about your actions. Buffett/Munger uses a baseball analogy to explain his philosophy. My knowledge of baseball is limited, but this analogy provided a valuable lesson. In the prior seventy years, Ted Williams was the sole player to achieve a single-season record of .400 in baseball. The Science of Hitting outlines the art of getting base hits. The strike zone was broken down into seventy-seven regions, with each cell representing the average size of a baseball as seen in its best form. He only went for balls that were in his “best” cells. His rate of hitting may fall if he were willing to strike out. However, a focus on the worst cells would have dramatically undermined his average hitting likelihood. As a stock market investor, you regularly see a variety of business proposals from security prices. You typically won’t do anything. In some cases, though, the ball may pitch at an easy curve and middle. You should swing for the fences. If you do, you will discover that your average hitting rate will improve significantly, no matter what level you start from. I used to observe a prevalent swing habit among investors. This is a traditional issue. Both personal and institutional investors are equally affected. One caused me to exit the conventional long/short hedge funds business. The other is just as detrimental to your long-term success. Megafunds, venture capital, respect, and endowments with high marks fulfill this role. And even if they come across a “fat pitch,” if you can’t use all your companies, that’s a problem. Capitalism Creates a Nirvana-like Results for Many Successful Entrepreneurs