On Li Lu's Reading List

On Li Lu's Reading List Li Lu has had a profound influence on me. I first learned about Li Lu through my classmate's recommendation of "Civilization, Modernization, Value Investing and China." What immediately caught my attention was the reading list of over 100 books that Li Lu organized by category in the book. I believe that, setting aside correlations, a reading list can actually be a good predictor of whether two people's temperaments are compatible. At the time, I was quite interested in the sections on civilization, modernization, history, and biographies — some were even books I had already read and loved. But my first reaction to the books on stock investing was somewhat dismissive. On one hand, although I had studied economics and finance during my undergraduate years, I wasn't particularly familiar with investing at the operational level. On the other hand, I felt those books were somewhat too "down-to-earth" and seemed out of place alongside the others. But I gradually came to realize that reading these books was actually an attempt to answer a series of interconnected questions. First, although there are many calls for identity mobility today, it is undeniable that for each of us who grew up in Chinese history and culture, China is a core part of our identity. But should this China be one that reveres Confucian and Mencian teachings, or one that embraces modern property rights, emphasizes incentive mechanisms, and is rich in innovative vitality? If the two are not in conflict and reconciliation is possible, what should such a China actually look like? And extending this question further: if each of us does not want to abandon the spiritual tradition of the literati-scholar class, how can we better participate in the modern market economy? What does "benevolence and righteousness" actually manifest as in modern society? Beyond capital accumulation, what is the meaning of investing, and why is it worth devoting our energy and effort to? I think the investment section of Li Lu's reading list, while serving as technical guidance for investing, is also exhorting us toward the virtues of the modern market economy: diligence, prudence, independent thinking, and integrity (fiduciary responsibility). Perhaps it is coincidence, but just as in the Bible, great catastrophes are usually caused by departing from virtue. Whether for individuals or for society, these should be values worth safeguarding. Of course, reading books alone is far from sufficient to become a successful investor — it requires ever-deepening understanding of current reality and tireless practice. At the same time, if we take Li Lu as a role model and aspire to achievements similar to his, we must also consider that when Li Lu arrived in America, it was a period when the Cold War had just ended and the international environment was unprecedentedly stable, China and Eastern Europe's market reforms were leading a nascent globalization, the new economy was booming, and American household participation in the stock market was rising like a rocket alongside financial innovation. But we should also recognize that at least a well-functioning market gives everyone a chance; at least the returns from most insider trading are not as large as people imagine; and what prominent funds, economists, and mathematicians know in most scenarios is not necessarily more than what most people know. Finally, capital markets have always been the sector most sensitive to change in the economy. The current AI has already demonstrated incredible capabilities in information processing and analysis. What kind of impact this will have on investors — or on the even more ancient profession and class of merchants who hoard goods for speculation — is a question that every practitioner must answer. Is it that the massive deflation of information lowers entry barriers and intensifies competition, or will it directly replace the individual's role as a decentralized allocator of resources in the economy? I think on this question, we may have more authority to speak than our predecessors.