Zhang Xin – the fearless woman who built Beijing

Zhang Xin is the co-founder of SOHO China, the largest real estate developer in China. She’s worth over $3 billion in net worth.

Zhang Xin was born in China in 1965. At 14, she left for Hong Kong with her parents. At 19, she decided to leave Hong Kong for England to pursue her education by herself with the savings she saved from working at a factory. She spoke very little English at first. She took English classes, worked part-time to support herself, and got herself into Cambridge university. After graduation, she worked for a company in England, which was later bought by Goldman Sachs. Zhang Xin was transferred to New York.

Zhang Xin’s mind and heart was with China. She left Goldman Sachs in 1994 to go back to Beijing (her parents still lived in Hong Kong). She got married to her husband and together they founded SOHO China. The rest is the history.

What made Zhang Xin successful is her daring to take on projects no one wanted to take on. When people saw risks, she saw opportunities and excitement.

More on Zhang Xin:

https://qz.com/work/1177224/soho-chinas-zhang-xin-became-a-billionaire-by-falling-in-love-with-risk/

What I learned from Warren Buffett’s 2019 Annual Letter

If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been reinvested, my stake would have grown to be worth (pre-taxes) $606,811 on January 31, 2019 (the latest data available before the printing of this letter). That is a gain of 5,288 for 1.

I first learned about Warren Buffett in 2006 when I picked up the Intelligent Investor. My immature mind discarded him completely as I loved getting rich quick schemes of speculators more. In 2013, after being hit for many years with heavy punches to the gut and receiving the final blow to my head, I decided to study the Oracle of Omaha to understand why he’s been so successful for such a long time while my idol speculators either killed themselves or died poor. The study took months as I poured into his writings and his talks.

The results:

  1. I stopped losing money feeling like a fool and a gambler.
  2. I founded a value investing fund to invest in Vietnamese companies. After 5 years of investing, what I learned from Warren Buffettt and practiced is working wonderfully.
  3. I became more at ease with being myself. The most notable is that I happily live a frugal lifestyle and pay almost no attention to what others say.

Every year at this time, I am eagerly waiting to receive the annual letter from Warren Buffett. Today is no difference. It’s the first thing I looked for when I woke up.

After many tries, I finally could download the letter. There must have been too many people trying to get his letter at the same time since Berkshire Hathaway’s website was extremely slow.

In this letter, Warren Buffett again showed his love for America and his belief in the long-term prospect of America.

Buffett’s buying criteria: “to buy ably-managed businesses, in whole or part, that possess favorable and durable economic characteristics. We also need to make these purchases at sensible prices.

Buffett has written many times that he paid little attention to daily fluctuation of stock prices, quarterly earning, and even one year earning. What he focuses on is the business and its prospect: “Focus on operating earnings, paying little attention to gains or losses of any variety.

Next, Buffett gave an outstanding lesson on “Focus on the Forest, Forget the Tree“. Berkshire Hathaway has many different businesses. If taken out to analyze each business, one might be very concerned as there are undoubtedly bad businesses or diseased trees in the forest. And there also are many healthy businesses/trees which will continue to grow in size. Taken as a whole, the forest is booming. “At Berkshire, the whole is greater – considerably greater – than the sum of the parts.

Will Buffett make more purchases in 2019?
My expectation of more stock purchases is not a market call. Charlie and I have no idea as to how stocks will behave next week or next year. Predictions of that sort have never been a part of our activities. Our thinking, rather, is focused on calculating whether a portion of an attractive business is worth more than its market price.

Where have fundings come from?

  1. Debt. Berkshire uses little or no debt though some of its subsidiaries might leverage debt when it makes sense.
  2. Equity. Buffett retained all the earning to invest and compounded it.
  3. Insurance float. Using float to invest has been a cornerstone in Buffett’s compounding machine.
  4. Deferred tax income.

Finally, as usual, Buffett dedicated the last portion of writings to teach. This year, he taught about American Tailwind or his belief in the long-term economic growth of America. This is worth reading several times.

Buffett made his first investment in the stock market with his $114.75 saving at the age of 11. “If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been reinvested, my stake would have grown to be worth (pre-taxes) $606,811 on January 31, 2019 (the latest data available before the printing of this letter). That is a gain of 5,288 for 1. 

Is Gold safer than stock? If I ask people, the answer is mostly YES. However, history proved that most people are often more wrong than right.
If the same amount of $114.75 was to put in gold, by now it would be worth $4,200. “The magical metal was no match for the American mettle.

And it’s a dream to say the same: “For 54 years, Charlie and I have loved our jobs. Daily, we do what we find interesting, working with people we like and trust.

The full letter: http://www.berkshirehathaway.com/letters/2018ltr.pdf

What type of organizations would you commit a portion of your life to?

When Peter Drucker was asked: what should students ask a prospective employer about leadership and mission before making a decision to commit at least a portion of their life to the service to the organization?

I would probably tell that student of mine that he should hold that question a couple of years until he knows a little more both about himself and the organization, but then …
I would ask him, “Are you learning enough?”
That is always my question.
“Are you challenged enough?”
“Does the organization make use of your strengths or what you can do?” All together as a group of human beings,
“does the organization constantly challenge and make you more ambitious in terms of contribution?”
“Are you acutely suffering from creative discontent?”
I hope at age thirty that you are not content. That’s for six-year-olds. Being content is being a child, but there is a difference between negative and positive discontent.
If you say, “They aren’t any good; nothing ever gets done; and all they want is for me to come in from nine to five.” And if you say, “You know, the nice thing about this organization is that it gives me so much time to play tennis,” basically you are too young to retire.
If you say, “You know, I wish I had more time for my family, and my tennis game has gone to hell because we have that big project starting that new trauma unit, and it’s really not my job but I am on the team,” or, “We have that enormous job here in the new school we are building and [we are] recruiting faculty and so I spend all my weekends with the prospective faculty people”—OK, then you are growing but also the organization meets the first test, which is that it mobilizes human resources, challenges them, grows them.
My next question is: Look at the mission. Is it one in which you can make a difference?
Sure, none of us make a great difference. No institution is that important, but is it one that makes—I wouldn’t say [makes] the world richer; that’s such an ambitious statement—but it makes a difference. That emphasizes the more responsibility we as human beings have. Or is it one that just won’t really be missed? All right, none of us are going to achieve a great deal. But everyone has a chance to achieve.

A question worth focusing

In front of me is a master.

I came to see the master in a moment of struggle. In reality, I was at a cross-road. The master can detect my struggles by looking at me in a complete stillness.

The master: “I see that you have been struggling. It seems to me that your attention has been on how you will survive.”

Pausing for a long moment, the master continues: “You will probably survive.”

The master: “and you also focus too much on how to be successful…That’s a wrong question.”

Pausing again for a longer moment, looking at me in complete calmness of a master, he continues: “The question is how to be useful.”

With that, I am enlightened. A great teacher changes my life in a matter of seconds.

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About the author: Hoan Do is a certified leadership coach, a value-oriented investor, and an entrepreneur. Hoan led multiple teams at Symantec Inc. across the globe delivering world-class solutions to protect consumers and businesses. Hoan is an expert in building highly performing teams. He believes that the best leader is the leader that could grow his followers to be leaders. Hoan has trained many leaders via mastermind groups, workshops, and one-on-one coaching.

If you would like to have a conversation, open your email and send me an inquiry at coach@hoanmdo.com