What did the 28-year venture capital queen learn from Munger? Xu Xin’s latest sharing: Investing is also an art of regret. It is enough that more than half of the companies you invest in are great.
Yesterday (August 26) afternoon, Venture Capital Queen Xu Xin of Today Capital shared her feelings and practice of reading Munger from the perspective of her 28 years of primary investment at the "Munger Way" reading meeting hosted by Munger Academy in conjunction with CITIC Publishing Group, CITIC Academy and Enoch Bookstore.
At the beginning of 2023, Forbes China once again launched the "Female Venture Capitalists" list, and Xu Xin returned to the first place after a year. In the past two years, in addition to the listing of this super unicorn directly hired by Boss, the cash exit of Manner Coffee has also brought her considerable returns.
When Zong Qinghou wanted to create China’s own bottled water, she gave Wahaha its first investment of US$40 million.
When Ding Lei was deeply involved in the Internet bubble crisis, she helped withstand the pressure of all NetEase shareholders.
When Liu Qiangdong was rejected by investors, she gave JD.com a life-saving money of 10 million US dollars.
In addition, she has also invested in Yonghui Supermarket, Dingdong Maicai, Daily Fresh, Meituan, Yifeng Pharmacy and many other companies that are closely related to people's lives. From this point of view, the preferences of many consumer goods companies are very similar to Buffett Munger.
Talking about the help and impact of reading Munger on her career, thinking, and mentality, Xu Xin was a little more excited than usual. She excitedly shared the "road to simplicity" that Munger brought to her, such as:
How do invested companies manage their exit?
How can I be smarter every day?
What do you think of diversified investments?
What does a happy life need?
Xu Xin shared his inspirations over the years one by one. We have sorted out 39 of her most exciting sentences in this event and shared them with friends who have the same confusion over the weekend.
Buffett and Munger have taught all the basic principles of life
1. I asked Munger, we have invested in some very good companies and are friends of time, but the fund needs to be sold when it expires. How do you think about exiting? Munger said that the best exit is to invest in a great company like Costco and never sell it.
2. Venture capital is a business that invests in changing the world, while value investing is a business that invests in a world that cannot be changed. One is investment that changes, and the other is investment that remains unchanged.
3. The first book I started reading was "Poor Charlie's Almanac" and I also read all of Buffett's annual reports. I often read the same book they read over and over again. The book is the same, but as I progress, my understanding becomes different. Good things should be read over and over again. Try to read them as many times as possible.
4. Sometimes I feel very lonely because our approach is different from others. We are running a 28-year fund. But every time you read their annual reports, you will feel that there are two great wise men who are traveling with you. They are like old friends.
5. Why are Munger and Buffett good? They tell you the most basic principles of life. Munger can always get to the point when he talks, and he is very simple, but in fact it has a great impact on you. Invest with the perspective of choosing a son-in-law
6. Buffett’s eyes light up when he sees a bargain, but I light up when I see growth.
7. An example that has a greater impact on me is NetEase. I am not saying that I had a particularly good vision at that time, but because at that time (the Internet bubble burst) we were already in hell. The biggest advantage of being in hell is that it can't get any worse, and you'll be on the way to heaven from now on.
8. Investment is an art.You have to believe in the founder, because the future is uncertain. He (the founder) can see the future. If you believe in him, you dare to invest in him if you have faith.
9. In 2007, I invested in a large pharmacy and later went public, but I was reluctant to sell it. I think it is a good business. I think of Buffett saying that your criteria for investing in entrepreneurs are very simple. It depends on whether the entrepreneur can be your son-in-law. He must have good character and not be too poor in ability. I thought the founder of this big pharmacy could be my son-in-law, so I continued to hold it. Investing is the art of regret. Investing in half of the great companies is enough
10. Munger said that his success depends on concentration, not IQ. He will do one thing, ask the question to the end, think it through, think deeply, find the right answer, and then take action.
11. Munger said, you live in a prosperous town and have invested in the three best companies in the town. Isn’t that diversified enough? I think we are on to the point. Find your three stocks carefully and take a heavy position once you find them.
12. When we are VCs, we used to be afraid of missing out on a great company. But in order not to miss out, you look at a lot of them, and you don’t understand them deeply enough. If you don’t understand them deeply enough, you don’t dare to add positions. So later I felt that investing is also a regrettable art. There are many great companies that you cannot invest in, but if you invest in more than half of the companies, it is enough.
13. Munger also said that there are not many great companies, and you should not invest in a lot of them randomly. Also, you don’t need many opportunities in this life, just four or five major opportunities are enough.
14. First of all, you see these major opportunities that others have not seen. Secondly, you not only see them but also dare to take heavy positions. Thirdly, you take them for a long time. These few are enough.
15. Whether you enjoy the compound interest of time has something to do with your long-term patience. I think the reason why Buffett became the most thoughtful investor is because he understood this truth at the age of 20.
16. My biggest experience in venture capital is that you have to hit home run. The home run is that you have to invest in a great company. First, it must be number one in the industry. Second, you must make 8 times the profit.
17. "Home run" has two factors, one is frequency, which is determined by luck. Were you born in a certain era? Have you seized the opportunities of the Internet and AI? We are really lucky; the other is intensity, that is, how much money you make per home run, which is determined by only two things, one is the share ratio, and how long you take it. How to practice what Charlie Munger said: "Be smarter every day"?
18. Buffett Munger reads about four or five hours a day. Those powerful people, such as Musk, why do they know so much across industries? Because he is a person who reads a lot.
19. A curve. The horizontal axis is time and the vertical axis is your awareness. It goes up relatively gently at first, but then it will have a very steep curve. So you must accumulate the volume to the tipping point, but it must also be related to the industry.
20. A big dream can be turned into a specific habit in life, so that it can be implemented, like brushing teeth and doing fixed things at a fixed time.
21. I write down a lot in my notebook every day. When you open your eyes in the morning, don't hold a notebook, just think about what you learned yesterday, and try to think it out. This is a good way to fight against the forgetting curve.
22. Munger said that becoming rich is a very enjoyable process, and you have to savor it carefully.The beauty, so don’t get rich too fast. But most people are very anxious. He said that in fact, learning and making progress every day is very rewarding in itself, and you must be good at learning.
23. You’d better read classic books. Don’t read inferior books if they are meaningless.
24. Reading must be very lonely, so you have to read it yourself first. I saw someone say that he should read at a very good table every day, with a good view outside, a sense of ritual, and then spend time in it.
25. It is best if you have a group of friends. The best way to learn is to teach. After you have learned it, tell it to the children. If you are not good at teaching it, you have not learned it well, right? And everyone has to talk to each other.
26. We have a walking group of girls. We get together every month and ask what did you learn this month? At that time, you will feel pressure because others are making progress. I think it is very good to have such a sense of ritual.
27. My hobby is chatting with entrepreneurs. Even if I don’t know the people in the circle, I can still learn from them.
28. There are some founders you can’t meet, such as Musk. But I can watch all his speeches, and it works. You can still learn the first principles and you can still make progress.
Advice for young people
29. Everyone has basic needs, first food and clothing, then recognition, and finally self-realization. Therefore, the reason why young people lie flat is that they have not found what they like to do. If they find what they like, they can do it well.
30. Young people are capable of decision-making, but because the quality of information is not good enough, their peers are all hot-blooded, focusing on short-term things and hormonal impulses. In this case, reading and communicating with excellent people is very important.
31. Munger gave an example in the book. He said that there was a person who was very unsmart and asked the same question many times. But he insisted on one thing, that is, if I don’t understand, I won’t vote, and he will keep asking until he understands. This person always asked questions when he saw people, and he kept asking questions for many years. It took him a long time to understand, but he figured it out and made good money.
32. Many young people say that they have heard and understood the truth, but they still cannot live a good life. I don’t agree. In fact, Munger's example shows that you can succeed even if your IQ is not enough. This is a question of attitude. It’s okay to stick to this attitude and work hard.
33. Munger said that I will definitely not be good at things I don’t like. I can do well if I find something I like. Therefore, when young people find something they like, they find a job. If they don’t find something they like, they should think about how to find their own interests. About happiness: Lower your expectations, grit your teeth, and work hard
34. I read a Harvard study: The first element of happiness is related to intimate relationships. I feel like I have found the answer, but it is to base happiness on relationships with others.
35. Munger went to the next level: happiness requires lowering expectations. It has nothing to do with others, but to do with your heart. The lower your expectations, the happier you will be. I think this is the real master.
36. Munger also said that who you marry is very important. The example he gave is Lee Kuan Yew. Lee Kuan Yew has always been second in the class. He married the first place-a not-so-pretty wife. This means that you need to find a smart person, and genes are very important.
37. If you are feeling any pressure now, it is very good to read more of Munger’s books.
38. Munger said that the most important thing about happiness is your mentality. You cannot be jealous one moment and complain the next. Your mentality determines your happiness index.
Now I will send you a 60 yuan red envelope, and you can withdraw it directly without any tricks. Hurry up and participate in the event to get it
