China’s Buffett says he’s top man
By Jamil Anderlini in Hong Kong
In China, the role models presented by the state-controlled media tell you much about the momentous social changes of the past few decades.
In the golden years before the Cultural Revolution, the masses were told to emulate Lei Feng, the selfless worker-soldier who drove a tractor and spent his spare time doing menial tasks to aid his comrades.
Today, Chinese people laugh at mention of the quiet country boy who would get up in the middle of the night to darn his fellow soldiers’ socks, never once asking for recognition or reward.
They look instead to people such as Lin Yuan, a jovial, plain-looking man referred to as the “Warren Buffett of China” and revered for supposedly turning a paltry Rmb8,000 into a fortune exceeding Rmb1bn ($130m) during 18 years of stock investing.
Instead of exhorting the people to fill themselves with the Lei Feng spirit, the state-controlled media these days urges them to follow Mr Lin’s example by making long-term investments in quality stocks rather than the short-term speculative bets that have helped propel Chinese markets up more than 300 per cent in two years and prompted warnings of an imminent crash.
His investing philosophy may sound like that espoused by the Sage of Omaha. But Mr Lin bristles at the mention of Mr Buffett. “I don’t follow anyone else’s strategy. They follow mine,” the 44-year-old former medical student said in an interview with the Financial Times. “Why would I pay attention to Buffett? He’s a foreigner.”
It is impossible to verify his claim to billionaire status. Mr Lin offers few details of the scale of his wealth.
He says he owns many houses, including properties in Beijing, Shanghai and Shenzhen, but spends most of his time on the road visiting companies in which he invests. He also claims to own six cars, while spending no more than Rmb3,000 a month on living costs, excluding air fares and hotel bills.
But he happily details the 20 or so companies in which he owns shares and recommends other investors follow his example. His current top five are Maotai Liquor, Wuliangye Liquor, China Merchants Bank, Huangshan Travel and Shanghai Airport.
“I hope foreigners will come to China and buy more shares,” he said. “They can start by investing in the ones I own.”
Mr Lin bought his first Rmb8,000 of shares in Shenzhen Development Bank in 1989. His investment grew to Rmb120,000 in just a few months, he says, and since then he has ploughed everything back into the market, barring a brief foray into real estate during the bear years between 2001 and 2005.
His enthusiasm for sharing his investing wisdom through the media has led many to question his integrity.
“To get from Rmb8,000 to more than a billion he would have to earn compound returns of more than 85 per cent, which is better than Warren Buffett and would probably make him the most successful stock investor of all time,” said Isaac Meng, an analyst at BNP Paribas.
But as a model investor Mr Lin champions the messages the government wants the masses to heed: invest in quality stocks for the long term and beware market risks. And this is probably what explains why he gets such wide coverage.
He even echoes senior government officials’ warnings that the market’s recent rise risks being a “bubble” – though that does not mean he is cashing in.
That is the kind of hero that appeals in China today.
