Li Lu, "the Chinese Warren Buffett," Has Invested 70% of Himalaya's Capital in Just 2 Stocks
Key Points
Li Lu was greatly influenced by Warren Buffett to become a value investor.
Lu launched Himalaya Capital in 1997.
Himalaya runs a very concentrated stock portfolio of seven stocks.
Li Lu, the founder and chairman of Himalaya Capital, has an incredible story.
The Chinese native served as a student leader during the Tiananmen Square protests in 1989 and eventually became a deputy commander-in-chief. After being added to China's most-wanted list, Lu eventually escaped to America and fell in love with investing.
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Lu actually chose to become a value investor after hearing the great Warren Buffett speak at a lecture at Columbia University. He eventually established a close relationship with Buffett's right-hand man, Charlie Munger, who called Lu the "Chinese Warren Buffett."
Munger even invested tens of millions of his personal money into Himalaya Capital, the fund Lu founded in 1997. Lu runs a concentrated stock portfolio of just seven stocks valued at over $3.7 billion at the end of the second quarter.
The concentration is also evident in the way Buffett and Munger invest. At the end of the second quarter, Lu had invested 70% of Himalaya's capital in just two companies.
Image source: Getty Images.
1. Alphabet: 48%
Lu and his team are all in on Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), with 48% of the fund's capital split among class A and C shares of the stock. Interestingly, Berkshire Hathaway has also recently made Alphabet one of its largest equity positions.
Himalaya first began buying Alphabet in the second quarter of 2020 and has significantly increased its position. The stock has performed phenomenally since then.
Alphabet has faced significant challenges during this time, including a Department of Justice (DOJ) lawsuit alleging that Google engaged in monopolistic practices in its digital search and advertising business.
While a federal judge agreed with the DOJ, the judge also stopped short of imposing the punitive measures investors feared, such as requiring the company to divest its Chrome web browser or preventing Alphabet from paying Apple to make Google the default search engine in Apple's Safari web browser.
Investors have also been worried about how Google would compete with emerging large language models (LLMs) that are challenging traditional search, a market it has long dominated.
However, Google's artificial intelligence overviews at the top of most search results and its Gemini family of LLMs are competitive. Other Alphabet businesses, such as YouTube, Waymo, cloud, and its custom chip unit, have also proven to be strong.
Currently trading at 16.4 times forward earnings, it's clear that the team at Berkshire and Lu think they are still buying a wonderful company in Alphabet at a fair price in the long term.
2. PDD Holdings: 22%
PDD Holdings (NASDAQ: PDD) is a large e-commerce company based in China. The company owns brands such as Pinduoduo, which allows people in China to buy items at lower prices by adding friends and family to a group, essentially buying in bulk.
PDD also owns Temu, an international e-commerce marketplace that operates in the U.S. and connects consumers directly with factories and manufacturers in China, giving them access to deep discounts.
Himalaya has owned the stock since the second quarter of 2025 and has significantly increased its position since then. The stock has struggled in this period, however.
PDD has struggled for a few reasons. The trade war between the U.S. and China, which essentially broke out when President Donald Trump took office, has hurt Chinese companies. However, there's also been fierce competition in China with other large e-commerce players like Alibaba and JD.com.
Economic growth in China has also been decelerating recently, which might be pressuring the business.
Trading at below 9 times forward earnings, the stock is cheap and has a huge opportunity with the Chinese economy.
But U.S. investors really need to understand China's regulatory environment and economy if they are going to invest in Chinese stocks, despite how tempting the valuations might be.
Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Berkshire Hathaway. The Motley Fool recommends Alibaba Group and JD.com. The Motley Fool has a disclosure policy.