#362 Li Lu

0:00 A few weeks ago I was talking to John Mackie, the founder of Whole Foods, and he told me one of the craziest things anyone has ever said about the podcast. He had listened to over a hundred episodes before he met, and he told me that if founders existed when he was younger, that Whole Foods would still be an independent company. He said that since the podcast and all of history's greatest entrepreneurs constantly emphasize the importance of controlling your expenses. he would have put more of a priority on it, especially during good times. It is

0:25 natural for a company and I think for human nature. to just not watch your costs as closely because everything is going so well. Andrew Carnegie had one of the best ways to describe why this is so important, because he would actually repeat this mantra time and time again. He would say, Profits and prices are cyclical, subject to any number of transient forces on the marketplace. Costs, however, could be strictly controlled, and in Carnegie's view, any savings achieved in the cost were permanent.

0:49 That quote from Carnegie is something I was talking about with my friend Eric, who's the co-founder and CEO of Ramp. Ramp is now a partner of this podcast. I've gotten to know all the co founders of Ramp and have spent a ton of time with them. Over the last year or two. They all listened to the podcast and they picked up on the fact that the main theme from the podcast is on the importance of watching your costs and controlling your spend.

1:08 and how doing so can give you a massive competitive advantage. That is a main theme for Ramp. The reason that Ramp exists is to give you everything you need to control your spend. Ramp gives you everything you need to control your costs. Ramp gives you easy to use corporate cards for your entire team. Automated expense reporting and cost control. Those last two words, cost control. There's a line. In Andrew Carnegie's biography that says cost control

1:34 became nearly an obsession. I believe if Andrew Carnegie was alive, he would be using Ramp because Ramp would give him everything he needed to control spend, optimized all his financial operations on a single platform. Make history's greatest entrepreneurs proud by going to ramp.com to learn how they can help your business control costs. That is ramp.com. The book that I wanna talk to you about today is Moving the Mountain. My life in China from the Culture Revolution to Tienan Square.

2:04 And it was written by Li Lu. Lee Lu is the founder of Himalaya Capital Management, which he's been running for about thirty years. Lee also had A twenty year investment partnership with Charlie Munger. I came to know about Li Lu because one time Munger was talking about the importance of patience and he told a story.

2:23 Where he made four hundred or he told the story of how he made about four hundred or five hundred million. from reading Baron's magazine for fifty years. And Munger said, I read Barron's magazine for fifty years. The entire time I only found one idea that I could act on. Only one. I made eighty million dollars on that idea, basically risk free.

2:40 And then I took that eighty million. And I gave it to Li Lu and he turned it into four hundred or five hundred million dollars. So Li Lu is known to have this cult like following, he's known to have fantastic financial returns. But that is not. What this book is about.

2:54 Lee wrote this book in his early twenties when he fled communist China for the United States. When the book ends, there is no possible way for Lee to know or predict what his future holds. And so I want you to keep that in mind as we go through what is going to be one of the most remarkably difficult childhoods that you and I have ever studied together. And so the book starts with Li Lu when he's in preschool. And I need to tell you up front, this book is really hard to find. There's only two copies.

3:22 available on Amazon right now. One is for sale for like three hundred dollars. The other for six hundred dollars. So I need to think Kenny Lee and my friend Moses Kagan. Kenny lent this book to my friend Moses, and then he allowed Moses to send The book to me. Which in turn allows me to make this podcast for you. So let's go ahead and jump into this unbelievable story.

3:39 The last three year old besides myself was crying in the big room of the kindergarten. A boarding school for preschoolers. But soon even he would go And I would be left all alone. And then

3:50 The hunger. I dreamt of eating lizard meat. The only thing I could do was drink water to fill my stomach so full that it hurt. And made me briefly forget about my hunger. And so at this boarding school, this kindergarten

4:03 Lee is the only one without a family, so he's the only one that doesn't go home. So imagine he's Probably four or five years old. And every weekend all the other kids get to go home. Lee cannot go home and we'll find out why he can't go home. He goes he's gonna be in uh like nine different I think he moves around nine different times by the time he's nine years old. So it says the other kids had come back and would show off the goodies they had brought from home. They talked about the movies they had seen or the stories they had heard from their parents.

4:27 And so from the very beginning, Lee understands how different his life is from his classmates. I was scrawny. I wore the same jacket and pants all year round. My clothes were covered with holes and patches. I was always dirty. And so immediately he starts to get bullied by his entire class.

4:43 They somehow learn that my parents were people with problems. Your father's a spy. And your mother's a landlord's daughter. Remember, this is communist China. You're nothing but a bastard. The children would start to chant Bastard, bastard, nobody picks you up. Bastard, bastard, nobody picks you up. My kindergarten was like a prison. Every day we got up, dressed quickly, and washed.

5:03 Then the whistle blew. And we lined up to go to the dining room. Then we sat at the long tables with our hands behind our backs. The teacher made a speech. The big kids would then recite some of Chairman Mao's quotations. The teachers would control the children by making them hate each other.

5:20 By encouraging factions. That was what you could do when you had authority. The teachers beat the children with whatever was at hand. Fly swats or sticks and a bamboo switch. At meals we had to sit still while the teacher put the food in our bowls.

5:35 If you ate too fast. You would be hit. And you had to eat. Everything. I was scared to death.

5:43 And so throughout this entire book, there's multiple examples of Lee being different from everybody else around him. And so at this time, there's when he said I dreamt of eating lizard meat. It's because at this boarding school they're overrun with these giant lizards. And all the other kids said, If the lizards touch you, they're poisonous and they'll kill you. And so this collective brainwashing is a major theme throughout the book. And so instead of actually looking in, it is what we're being told true, all the other kids just accepted it. But Lee did not. And so one time he had a bunch of lizards come on top like they they called all over him and he's like, Well

6:14 Nothing happened. There was no poison. And this is the result. My courage grew. I was no longer afraid of lizards. Gradually I grew in confidence. Gradually I realized that the most important thing was confidence. If you had confidence and believed you were right.

6:28 You would feel stronger. And so that's the first indication of an important part of his personality is like I want to seek the truth. I he's intensely curious. He wants to gather information and have an accurate reading on the world. And he is a fighter. And so there's other kids in the same grade that are given authority by the teachers, and they're called uh officials. There's a first, second, and third official.

6:49 And they typically bully and try to intimidate the other kids, and this is what happens when they try to do that to Lee. The first official swaggered over to me, clenching his fist, but I was prepared and hit him first, knocking him to the ground, which completely crushed his position as the number one leader. The second and third officials looked at each other and then ran away. This greatly enhanced the status that Lee had with his other kids in our small society it rose from the very bottom right to the top. Yet I retained a deep sense of inferiority from my lack of contact with

7:17 With the outside world. Wait till he learns how to read. That changes his entire life because at this point he's completely think about it. He has no family. No money no resources of any time.

7:29 Of any kind doesn't leave. He's the only child not to leave the walls of the kindergarten. Everything he does, everything he learns is completely controlled by others. He has no idea what's going on with the outside world. And you see right from the very beginning, he develops these instincts and these these skills that become very valuable if you want to be an investor, right? When other children were talking about what they saw and heard. on Saturday night and Sunday, I felt inferior.

7:54 I had no way of acquiring information. I had no home. No one to take me out. No food. So what does he do? When the kids come back, they usually little kids are like bragging, like I saw this movie and I eat this. He starts asking questions and changing just these sessions of people bragging about what they did for the weekend is a way for him to learn.

8:12 I had to ask detailed questions to understand a story and often interrupted the storyteller. I developed a keen sense of imitation, narration, and imagination. I had a great thirst for knowledge. My inquisitiveness and imagination came from my shut up life. These questions and answering sessions is the only way

8:30 That he got information about the outside world that I had never seen. So when he is six years old, he's actually attacked. by a giant swarm hornets. And his response to this gives you an insight into his personality. Says the more violently the hornets attack me, the stronger my will was to fight them. Eventually he collapses and is taken to the hospital. And then it's at this point that we first get his introduction to his biological father. A week after I left the hospital, my father came to collect me.

8:55 We can't keep the child any longer, said the head of the kindergarten. When we agreed to take him, we were doing you a favor. We would not normally accept a child. Of such terrible family background. My father carried me away on his bicycle.

9:08 They can do and he's talking about the government of China at this point. They can do anything to you if your background is bad. My mother was from a landowning family, and that's bad. My father listened to a foreign broadcast on the radio and someone overheard it. So they accused him of being a spy. That's even worse.

9:25 Since the cultural revolution, all intellectuals have been considered useless. My parents who had gone to universities were were put into the lowest category. Shortly after I was born. My parents had to send me to foster family.

9:40 And then I went to that kindergarten. Even now, my parents couldn't keep me. They were both under political attack. And couldn't even have a home of their own. My father took me to live

9:52 with da pa so that translates to big dad, which is what you and I will call him. Big dad And then Big Mom and their six Children. My father and big dad Had met in the coal mines.

10:04 Big Dad is a true friend to Lelu's biological father. And he agrees to take him in, even though he has six sons and a wife to support. They live in a tiny little Two room. Shack, I guess is what you would call it.

10:19 They had very little money to the point where the all their clothes including Lou's had to be m had to be made by Big Mom. And the kids had to go out in the street and work. They weren't they had to to feed themselves, they had to raise their own chickens. And so They would go including Lelu and the other sons, would go out in the streets picking up tree branches for firewood. And collecting thrown away cabbage.

10:38 For the chickens. He is in a terrible environment. For anybody, much less a six year old. And so a lot of the neighbors are impoverished.

10:50 Is drunk all the time, he beats on his wife. There is all kinds of violence and so there's a fight that breaks out. And during this fight Somebody tells Lee that your father is a spy. And so this part is absolutely heartbreaking. Imagine a six year old saying this to you.

11:06 After the fight, Big Dad punished all of his sons except me. I cried and asked him, Aren't you my dad? Why do they say my dad is a spy? Are you a spy? Big dad said, I am your dad. Just ignore what they said.

11:18 But there's this other man, Li Lu says. I also call him Pa. I said, Who is he? Is he a spy? He had spent so little time with his biological dad, he doesn't even he's not even sure who's father is. Big Dad sighed and said, Don't think about it, child.

11:34 You stay here. Nobody can do anything to you. If anyone wants to bully you You have me here. I felt pain at my heart. And then another main theme of the book is the fact that humans, if they put in a position of power and authority

11:48 will usually abuse that. He's constantly seeing the contradiction and the hypocrisy. between what the state is telling them and a what actually happens. And so there's a family in the community called the Zangs, and he says, When I think of the Zangs, I think of true evil. So these are people living in the neighborhoods, but they have close relationships with the government. And so they call them the director of the neighborhood committee.

12:09 And so the government sends the directors of the neighborhood committee ration tickets. Ration tickets were required to buy such things as meat, fish, and vegetables. But if the Zangs did not like you, they could simply tell you that they didn't get enough tickets from the district government and essentially starve you. They also had close connections with the local police, which gave them further power. And this is his description of Aunt Zhang. She was cold and cruel and always found a way to hurt people. And so the neighborhood he's growing up in is inhabited. It's really close to the coal mines. It's inhabited coal mine workers. That's what Big Dad does.

12:41 He says one day there had been an explosion in the mine. Dozens of miners were trapped. Big Ma looked stunned. Her husband was among the dozens of miners stuck down there. So Big Ma and Lilu go to the mines, and this is what happens. We saw about 10 miners emerge pushing carts. On the carts were bodies. We found Big Dad on a cart. His face was blue.

13:02 His mouth Nose and ears full of coal. He was cold and hard. Big Ma Collapse.

13:09 This family had lost its pillar. And so did Li Lu. Remember his his dad, where he thinks is his dad. Said, Don't worry, I will protect you. I am here for you. The family had lost its pillar. What would they do now? A family of six children and a mother.

13:25 The family collapsed. We had nothing left. Very soon the family had nothing to eat. I could no longer stay with them. Think about that. That's an entire story in four sentences. Everything I'm reading to you. Happens over many, many pages.

13:40 But those four sentences tell you an entire story. The family collapsed. We had nothing left. Very soon the family had nothing to eat. I could no longer stay with them.

13:51 Remember Big Ma and her six sons. We'll go back to them in about three years from now. Now he's about seven or eight years old when this is happening. His parents are being quote unquote rehabilitated by the Chinese government. And so for the very first time he's going to live. with his parents. They live together in a single small Room.

14:09 No bigger than a room in a student dormitory is the way that Lilu describes this. My family finally had space of its own every few weeks. My mother would come in from the commune. Where she's living and working. and a guest being rehabilitated and we would get together.

14:24 I called the days when we were together the days I have a home. But I felt awkward with my parents. They were strangers to me. And so Lee does the math for us. He says by the time he's almost nine, I had lived with at least nine families. And this is the beginning of this intense desire to learn.

14:43 To learn how to read and to make money so he can support himself and the people he loves. I felt superfluous. Being shunted from house to house. and gradually inferior. Perhaps the world did not welcome me. I wanted to grow up fast so I could make money.

14:57 And support Big Ma. One day my father's institute told him that he'd be sent away for six months. My mother was still living in the orchid com commune and none of my parents' friends could take me in Any longer.

15:11 And he is saved by the generosity Atrocious teachers. But he's got a few. that have great hearts and that actually care about'em and wanna teach'em and help'em. One day at my school

15:25 Teacher Wang said to me, I hear you're leaving us. Do you still want to learn to read and write? I told her I want to study. She said, You cannot leave here. You can live in my home if your family cannot take care of you. And this is going to be one of the most important sentences of the book because it's going to be the foundation upon which his future wildly. wildly successful career is going to rest upon. I had begun

15:45 To love reading. And yet in every new environment he finds the same recurring theme that those in authority, that those in power routinely abuse the people that they have Power, control, and dominion. Over.

16:00 And so there's this kid in the neighborhood called Fatty. Faddy's father was the chief of the Bureau of Electricity, so he's a very important person. And Fatty is a bully. And Lee is a fighter. And so when Lee sees Fatty beating up a girl.

16:15 This is what happens. Fatty was furious, dragging the girl along by her hair. She screamed in pain, so I went up to Fatty, slapped his face. And said that go of her. I bit his hand. I seized a stone and began hitting him on the head. Fatty had hardly expected a skinny boy like me to fight so fiercely and effectively.

16:33 And since Fatty's family is powerful, they try to take revenge against the family of the teacher that's letting Lee stay there. He has to go and apologize, even though he doesn't want to, and he says I felt like a jinx. Wherever I went, bad luck followed. In despair, I cried. I said in my heart, Wait till I grow up, fatty, see how I will settle accounts with you. It seemed that my childhood was over. I was no longer care free. I lost all interest in games.

16:55 I wanted to see and learn so many things. I started to observe. study and understand people, I became more and more reserved and introverted. And so what he's describing is he did not have the luxury of a childhood. He was forced to grow up fast. And somehow his life continues to get even worse. Li Lu survives the nineteen seventy six

17:17 Tang Shan earthquake. The Tangshan earthquake is the deadliest earthquake in human history. Over three hundred thousand people are going to die. The earthquake was so loud and powerful that in the in its immediate aftermath, everybody in the neighborhood thought that the atomic bomb had been dropped on them. It's completely dark when it happened. There's no electricity.

17:36 And Lee is running for his life and he says, Suddenly I tripped over something. My hand touched something fleshy. It was a severed arm. I blacked out and fainted. He wakes up. I looked around in the daylight.

17:47 All the buildings were gone. I ran as fast as I could towards the place where Big Ma and her family had lived. Their house had caved in, but the roof survived. Someone had dug a hole in the roof to look inside. When I look down through the hole I saw six pair of blue and black legs lying there.

18:07 All their upper bodies We're crushed under the roof. The last time I seen legs of such color. was when Big Dad died. As soon as I saw them, I almost blacked out the heads of Big Ma.

18:20 And the children had been crushed. Their brains were everywhere. Big Ma was kneeling over the two little ones. When the earthquake came She must have knelt over their heads to protect them with her back.

18:33 Now whenever I think about mothers I think of Big Ma kneeling over the children. is ten years old when this is happening. So the entire Town. Gone.

18:43 So he is sent to go live with his mother at the commune at the orchard. Orchard commune that she's at. And we see the same thing. The people in power They preach equality, we're all the same, and yet they do everything in their power to live differently. Than everybody else.

18:59 Life at the Orchard Commune where I'd gone with my mother and brother appeared peaceful and balanced. Everyone seemed to be eating and drinking like anyone else. But behind the facade. The crude inequality made me furious. The party secretary Had set up a separate tent for his own family. The cook prepared food separately for his family.

19:18 The secretary's family had better food because all of the relief goods were sent to him first. They consider these relief supplies to be their own property. The party leadership had said that we're all the same. That we should never take a piece of thread that was the public property.

19:34 That we must be honest, he is realizing that they are all brainwashed. that the official propaganda does not match the reality on the ground. He sees this over and over and over again during his young life. And listen to how they describe the death of their leader. This is when Chairman Mao is gonna die. While he's in school, one day the loudspeaker which had been silent for weeks suddenly came to life. Now important news is to be announced. Now important news is to be announced. This one sentence was repeated for half an hour.

20:01 And then finally a heavy voice spoke. The great leader of the Chinese people. The founder of the Chinese Communist Party, the great teacher of the revolution of the world The red sun in in the hearts of the Chinese people, the chairman of the Chinese Communist Party. and the chairman of the party military committee, Comrade Mao

20:20 passed away due to an incurable disease. And he detail the reaction to the people around him. They're crying and mourning. It's like you would you would expect their reaction is like almost if your child had died. The government had complete control over the flow of information. And the kids were indoctrinated and brainwashed before they could even read. And so at this point in his life, he's back to living with his mom and his dad in this like tiny little shack and says winter was coming.

20:45 Nothing was more important than acquiring a warm house. And so in order not to freeze to death, they have to build this thing called a kang. Also known as a Kang bed stove. So This is a traditional heated platform. Used for sleeping in the northern part of China where the winter climate is very cold.

21:02 And so other people in the community realize that Lee's dad is very good at building these kings. And so they come to him and ask him for help. My father became well known in the area as an expert kang maker. Every day people came to ask him for help. I was enchanted by my father. He was like an enigma, a riddle to me. Before the earthquake, I had never lived with my parents as a real member of the family for very long. So these trips with my father to build the king helped me understand him better everywhere he went.

21:26 People praised him. He was good at everything. I began to be proud of him. He was a first rate bricklayer, an excellent house builder, and an expert in building kang. And so it's during this time that he's living with his mom and dad that he finds insight into their past lives and why they were ostracized and why he was sent away.

21:46 And so he finds this suitcase full of pictures and writing. He says, I found pictures of foreign architecture. Bridges, churches, and people in strange costumes. I saw pictures of a young man with glasses wearing a white western suit. He looked so elegant and handsome. There were several photos of that same young man rowing a boat. Or hunting with a gun.

22:03 The more I looked, the more mysterious I found the people and places in the photos, and the more excited I became. Then it dawned on me. That the young man was my father. I told my parents of the small suitcase with the many strange things in it. Hearing this My mother became very nervous. How could you look at those things? You were only a child. She was so nervous.

22:21 My father's response was different. He said calmly, What of it? If the child is interested in those things, let him look at them. Didn't the cultural revolution end? And so for the first time in his life, Lee is now getting the information he needs to understand what was happening to him. So he talks about

22:38 the fact that they studied abroad, that those a lot of those pictures came from the Soviet Union. They told us about their childhood, their courtship. My father came back from studying the Soviet Union. My mother talked about her life. And the fact that intellectuals, which his mother was one, were sent to do farm work as some form of ideological remoulding. The life they described seemed so different from mine. It was a mystery to me. They were proud of their life in the nineteen fifties. It sounded like another world. I felt I could learn a lot from them. From that night I felt I had a home.

23:06 A father and mother. I felt I had a history and a goal. And so this is where we see that Lee's intense, intense dedication to learning, to reading. It's gonna serve him wonderfully in his future career. In fact, there's a the great uh Financial Times article about Lee I actually might do a uh another episode on Lee after this, but it says Lee's mantra became accurate and complete information. I'm I'm reading from the Financial Times article right now. Lee's mantra became

23:30 accurate and complete information. Complete sometimes meant going to extraordinary lengths to get a read on the CO of a company being researched by Himalaya Capital Management. Such as attending their church or talking to their neighbors. This is why biographies are so important, why understanding the early life of somebody is so uh fundamental to understanding why they do the things they do, why the way the the way they are. There is a talk about this, so

23:54 I also watched this he he gives a lecture at Columbia Business School. Lee gives his lectures in like two thousand six. A big part of the lecture is Lee absoluting These are Columbia MBA students.

24:07 And Lee is lighting them up. About how unprepared they are. There couldn't be more of a stark contrast be between the unpreparedness of these Columbia NBA students with the way that Lee conducts research. and runs his company and why? It is learning, it is reading, it is work ethic that saved

24:27 Please. Life. If you grew up like he did, you have two options find a way out or perish. And so at this point in the story, his dad is giving him the map of a way out.

24:39 You look so happy these days, father. Why? Yes, he said, I'm happy the National College entrance exams have resumed. I asked what is a college entrance exam? He said any young person who wants to enter college has to pass an exam.

24:52 It's kind of a competition. What is a competition, I asked. Competition means you work hard and society will give you a reward. I still didn't quite understand it. Is competition a good thing?

25:04 Of course it is, he said. Little Lou, you should work hard to prepare for your future. Go to college and study hard, he said. Now I remember this talk. And the last sentence repeated itself constantly.

25:18 I now knew what I wanted to do. I want to go to college. I had found my road to paradise. I kept saying to myself I want to go to college. I want to study.

25:29 This book is going to end with the Tiananmen Square Massacre and Lee literally being on the run from the Chinese government. He's put on the list I think of like the top twenty one most wanted student leaders for the TNM and Square demonstrations and protests and everything they did. Some of them did not escape.

25:45 to other places like Lee was able to And as a result, they spent nine years in prison, thirteen years in prison. In China. And so when Lee tells you in the book right now I found my road to paradise. I kept saying to myself, I want to go to college. I want to study. He moves to the United States. He can't speak English.

26:01 He learns English in a summer. And he becomes one of the first people in Columbia school history to receive three degrees simultaneously. He gets a BA in economics, an MBA, and a J D. So it makes perfect sense with what we've gone over so far in the book. with what you know about his background, and then you go watch that lecture that he did at Columbia Business School, and he is lighting them up.

26:24 He cannot believe how unprepared they are. There's a scene in a movie I think about very often. There's this movie called Seven with Morgan Freeman and Brad Pitt. And there's a scene in the movie where Morgan Freeman is let into a library late at night. By some security guards.

26:38 He's there to do some research. The security guards are sitting upstairs and instead of reading or learning or trying to improve what they know about the world, they just sit in an empty library at night. And they sit around playing poker. And Morgan Freeman, the character that Morgan Freeman plays puts down his hat and says, Gentlemen, I'll never understand you.

26:57 All these books. The world of knowledge at your fingertips and what do you do? You sit around and play poker all night. I think of that scene when I watch. Li Lu's lecture to the Columbia

27:10 MBA students. And I think of that scene because Lee's response is the exact opposite. So There's more than a hundred thousand school children that take part in this competition And Lee comes in fourth in composition.

27:24 Sixth. In oration. And among the first twenty in math. Around this time he's reunited with his grandmother. His grandmother, he says, was one of the first people to encourage me. She declared to everyone that I was no ordinary child.

27:37 She in in a previous life had been the principal of a school and part of the legisl the local government uh legislative committee. And for that she was sent tw to twenty years in prison. And so at the school he's at, he winds up meeting this woman, he says, So the woman on crutches told me that she worked in the school's new library. Come and see the library.

27:55 It astonished me. To see so many books all at once. Thousands of them. I had never seen so many books in my life before. In books, listen to how he describes this impact.

28:07 A person that Just str unbelievable struggle and devastation. For the first, you know, twelve, fifteen years of his entire life. Very limited view on the outside world. And this is where he realizes books is his way out. In books, I could travel to every corner of the world.

28:23 And communicate with the people there. I would read all day long. As I was doing research for this episode, I came across this wonderful quote by Charlie Munger that I think Li Lu would agree with. Charlie says, as long as I have a book in my hand, I don't feel like I'm wasting my time. Here's another thing that Lee Now think of how crazy this is. This is why I started with that story uh Charlie Munger at the very beginning of the discussion that you and uh you and I are having. The the version of Lee Lu that's writing these words that you and I are going over does not know Charlie Munger.

28:52 doesn't know of his existence, sure as hell doesn't know that he's gonna in the future have a twenty year partnership with him. Listen to what Lee that version of Lee. Is describing This this unfettered access to a library, what that's doing for him. Most of the friends I made in books.

29:07 Charlie says. Reading biographies means you're making friends with the eminent dead. They describe it the exact same way. That blew my mind. So this reading Continues. into what he calls senior middle school, which I think is like our version of high school in America.

29:23 And so he's reading biographies. Specifically, he's reading about biographies of scientists. So he's reading uh The Adam in My Family, which is by Enrico Fermi's wife, which tells the s the life story of her husband. And he's also reading about Albert Einstein and Albert Einstein and his Olympia club. So he goes, Oh, I think we should have a Chinese Olympia club to read and discuss the problems of our generation. It's development. The reforms

29:46 And China and its future. So this group would read and write and meet. It says the group met for the first time and we decided to call it stream. Because both of our quietness and persistence would flow like a stream. This group must be kept secret because the present educational system suppressed human nature. Students were slaves and teachers were gods, and so you were not allowed to question them.

30:08 You're not allowed to question is what you're being told. True. And so one of his teachers to take a liking to Lee realizes that You have to get out of China. David Ogy has this great quote where he says talent is most likely to be found among nonconformist dissenters and rebels. Lee is definitely a nonconformist, a dissenter and a rebel, and that's very dangerous in China.

30:27 And so originally Lee is studying physics, he eventually changes to economics, but his teacher tells him, You have talents in physics, but you cannot study here in China. You should go to the United States, study and research. Need an atmosphere of free inquiry. And so as this conversation continues, you realize that his teacher is giving him great advice that he did not follow. He had a tremendous variety of books and magazines.

30:47 But why should he still be reading when he was already so well read? Lee didn't understand. And this is something Lee talks about the compounding nature of knowledge. Uh so he says one night he told me a story. I was born in a peasant family in a remote village. This is gonna sound like Lee's life story. I was born in a peasant family in a remote village. For generations my family tilled the land.

31:06 The only thing I could offer was my youth and vigor. I could work hard and study well. So I only slept four or five hours a day and I read continuously. Though I was in a remote village, I spent all my money on books. I realized There was another world outside this one. He side in our country.

31:23 What you like. What you want to do and what you get to do are all different. hence why he's telling go to the United States. Each one of us is but a small part of a big machine in society. Only those who have power can decide. What role each of us can play in the machine.

31:42 And Lee is very similar to this teacher where he's like, you know, all I have was youth and vigor. I could work hard and study well. So I'm just gonna dedicate my life and really go after it. And we see the Lee does the same thing. I drew a drew up a detailed plan for myself. There were three months left before the exam. Every morning I got up at four forty five. From five until six I studied for an hour. From six until six thirty I ran to school as exercise.

32:03 and then reviewed what I had studied in the previous hour. I then stayed at school all day. At nine thirty I ran home. Nine thirty PM, that is, reviewing the day's study. At home, I ate something and worked until midnight. My desire to meet the challenge grew. I knew

32:20 That I would pass. Soon the results were announced for each school. I was fifth in my school and I knew I would get into a good university. So that is the end of the first half of the book. I recommend if you can get a copy, uh your hands on a copy of the book. Definitely The first half of the book up until he goes to college.

32:38 The second half is about becoming much more politically active. And then it ends with the Tiananmen Square massacre. And Lee having to flee for his life. So I'm gonna pick it up right there. Television, radio. And ubiquitous loudspeakers all kept repeating, citizens of Beijing, stay in your homes tonight. Students return to your colleges.

32:56 The army is going to clear out Tiananmen Square tonight. Citizens of Beijing, stay in your homes tonight. I saw the army start to march towards the square. People tried to stop them with their bodies. Soldiers push their way forward. Bayonets raised.

33:11 A girl student from Beijing University went up to the soldiers and said The students aren't rioters but patriots. A soldier thrust his bayonet into her chest and she fell down dead. People ran over to her. The tanks kept coming and coming and opened fire. Everywhere people were dropping.

33:28 People could not believe that the government could have shot at its own people. The tanks never stopped and they ran over the bodies. The soldiers were mad. They killed whoever was in their way. Hundreds armed soldiers charge the crowd.

33:42 Gunshots created chaos. The north side of the square was a sea of fire. Dozens of tanks. Enter the square. All the tents were being smashed under them.

33:54 There were still hundreds of people in them. They had gone to sleep. Thinking the worst would be that the police would haul them on to a bus And send them back to college. Now they were being ground to pieces.

34:08 People shoute names, parents trying to find Their sons and daughters. My mind became stoned. Only one thought which chisel on it. Why am I still alive?

34:23 And so now everybody's fleeing and trying to run from T M in the Square. And Lee says over the next few days I stayed at a different place each night. The government put my name on the list of wanted people. Our descriptions were issued to customs. Railway stations, bus stations Neighborhood committees. Our photos were posted all over the country and shown on television.

34:43 And so this time Hong Kong is still a British colony, so Lee actually uses a smuggling route that was established to bring contraband. of Western goods from Hong Kong. And so he uses that route to escape China. And he describes the last day in China. Dawn was approaching. I came out of the basement and took a deep breath. I would not go to prison. I would escape.

35:02 I look back on my life so far. I had grown from an unwanted child. to a fighter in Tineman Square. And now it was a criminal wanted by the government. I had experienced oppression and rebelled against it. I didn't want to give in. I wanted to escape.

35:16 I didn't know what kind of life awaited me. I just knew. That I was on my way. That is how the book ends. This is when he starts a new life in New York. At twenty three years old.

35:28 Twenty three year old Lilu had no idea. couldn't possibly have known. What lay ahead in his future. Highly recommend reading the book. If you can get a copy of the book, I will leave a link down below. If you buy the book using that link, you'll be supporting the podcast at the same time. I'm in the process of doing research on another Lilu episode.

35:46 this all about how he thinks about investing and company building. What he learned from Buffett and Munger, if I can get enough material. to make an episode that's worthy of your time. That'll be the next episode I do. But in the meantime, that is three hundred and sixty two books down, one thousand to go. And I'll talk to you again soon.

36:02 Real quick before you go, if you already subscribe to Founders Notes, make sure that you log in and get access to this new feature that I've added. There is now a private podcast feed included. In every subscription to founders notes, there's 51 short bonus episodes waiting for you, and I'm making more short episodes based on the research that I do. using founders' notes. So each episode we'll cover a single topic, like how do history's greatest entrepreneurs think about leadership? Are a single person like what are Henry Ford's best ideas? I'm going for a maximum insight.

36:35 to time spent ratio. So for example, I made an episode on James Nyson. I took a 40 year career, 40 hours of reading, down to twelve minutes full of ideas. From James's career that you can use in your life and work. If you don't already subscribe to Founders Notes, highly recommend that you do so because subscribers to Founders Notes have access to all of my notes and highlights for every book that I've read for the podcast, all in one giant searchable database. The podcast is a great tool to learn from history, but it's pushed to you founders notes gives you the ability to control it. It gives you the ability to tap into that collective knowledge. of history's greatest entrepreneurs and use it when you need it. If you're gonna spend hours and hours listening to different founders episodes, I would encourage you heavily to invest in a subscription for founders notes. It makes the lessons that you're learning on the podcast even more powerful.

37:21 It is the same tool that I use myself. I built it for myself years before I even had the idea to make it into a product and service that other people can use. Anytime you hear me pulling up an idea or a quote from a past episode that is me searching founders' notes. And I use it because it gives me the superpower to tap into the collective knowledge of history's greatest entrepreneurs on demand. And you can do so as well by going to foundersnotes.com and signing up for a subscription that is founders with an S, just like the podcast, that's foundersnotes.com. Thank you very much for your support. Thank you for listening and I'll talk to you again soon.

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