Lu’s Bets: A $3.5 Billion Portfolio

Li Lu, a name that doesn’t exactly roll off the American tongue, is something of a legend in investment circles. He’s often called the “Chinese Warren Buffett,” which is a bit like calling the Atlantic Ocean a large puddle – technically true, but lacking a certain… nuance. He made his name, rather early on, spotting the potential in BYD, the electric car maker, and it’s a story worth remembering, if only because it involved a student leader at Tiananmen Square turning into a remarkably astute investor. A rather remarkable trajectory, wouldn’t you say? It’s a reminder that life, and markets, rarely follow predictable paths.

Lu arrived in the United States, eventually finding himself at a Columbia University lecture given by the aforementioned Mr. Buffett. It seems the Oracle of Omaha had a profound effect, inspiring Lu to launch Himalaya Capital in 1997. It’s now a $3.5 billion fund, holding a surprisingly concentrated portfolio of just nine stocks. Nine! Most funds have so many holdings it’s like trying to herd cats. This is more like a carefully chosen team of thoroughbreds.

Then there’s the matter of Charlie Munger. Buffett’s right-hand man, a man who could make a spreadsheet seem thrilling, took a shine to Lu, providing $88 million to manage. Munger, who passed away in 2023, apparently saw a kindred spirit in Lu, a fellow devotee of value investing. It’s a testament to Lu’s abilities that he earned the trust of such a discerning investor. It’s also a reminder that in the world of finance, personal relationships still matter enormously.

Now, let’s delve into where that $3.5 billion is actually parked. At the end of 2025, a staggering 75% of Himalaya’s portfolio was concentrated in just three stocks. That’s…bold. Most portfolio managers diversify like they’re preparing for an apocalypse. Lu, it seems, has a rather different view of the world.

1. Alphabet: The Search for Future Dominance (44%)

First up, Alphabet, accounting for a hefty 44% of the fund. It’s hardly a shocking pick – Google is, after all, practically synonymous with the internet. But it’s a fascinating bet on the future of search, and on the potential of artificial intelligence. The recent legal victory against the Department of Justice was a relief, no doubt, but the real story is whether Google can maintain its dominance in a world increasingly powered by AI. The fact that Alphabet shares are up over 86% in the past year suggests they’re on the right track.

Beyond search, Alphabet has a portfolio of impressive businesses: YouTube, a digital behemoth; Waymo, attempting to revolutionize transportation; and Google Cloud, a rising star in the cloud computing arena. It’s a bit like a tech conglomerate built on a foundation of…well, knowing what everyone else is thinking. At 26 times forward earnings, it’s not cheap, but then again, neither is a decent cup of coffee these days.

2. Bank of America: A Solid Foundation (16%)

Next up, Bank of America, with a 16% allocation. Banks aren’t exactly known for their glamour, but they are the bedrock of the financial system. And Bank of America, as the second-largest bank in the US, is a particularly solid foundation. While bank stocks have had their ups and downs, they’ve generally performed well over the past year, thanks to declining interest rates and a steepening yield curve. A bit of financial jargon there, apologies. It basically means banks are making more money on loans.

The recent preview of changes to bank regulatory capital requirements is also a positive sign. Lower capital requirements mean banks have more room to lend, issue dividends, and buy back stock. It’s a bit like giving a car more horsepower. Bank of America’s scale and diversification across various financial businesses make it a good long-term bet on the US economy.

3. PDD Holdings: A Glimpse into the Chinese Market (15%)

Finally, PDD Holdings, the Chinese e-commerce giant behind Pinduoduo and Temu. This is where things get interesting. The stock has struggled over the past five years, down over 36%, due to challenges in the Chinese economy and rising competition. But that’s precisely why it might be a good bet. China offers large and growing tech stocks at lower valuations than the US. PDD currently trades at a mere 8 times forward earnings, compared to 23.9 for the State Street Technology Select Sector SPDR ETF. A rather significant difference, wouldn’t you say?

Of course, investing in China comes with its own set of risks. The regulatory environment is complex, and the economic outlook is uncertain. But for investors willing to take on that risk, PDD Holdings offers a potentially lucrative opportunity. It’s a reminder that sometimes, the best investments are found in the most unexpected places.

2026-03-20 15:23

1. Alphabet: The Search for Future Dominance (44%)

2. Bank of America: A Solid Foundation (16%)

3. PDD Holdings: A Glimpse into the Chinese Market (15%)

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