China's Warren Buffet, Guo Guangchang

Guo Guangchang elaborated his investment strategy during an interview with the Financial Times, which was published in the November 8/9, 2014 edition of the daily newspaper.

"The aim of tai chi is not to strike first to gain dominance over an opponent but to wait and hit at the right moment. That is, to be the first one to take action after feeling the change in momentum. Investing is similar to doing tai chi. No one holds a permanent speed advantage in the market due to the limits of human intelligence and vision. Your advantage comes from your ability to feel the change faster and take decisive action faster."

Buddhism teaches you that "everything starts from your heart, and feeling the heart of others is the most important doctrine in Buddhism. In doing business that means seeing things through other people's eyes. I feel that doing business is just like practicing Buddhism. Money is not your only purpose. Your purpose is to make things better for other people, and in the end, money will come as a result."

"Business is also the best form of charity. By making a company successful, you can provide more employment, and, if you treat your staff well, then your business itself becomes a charity."

Guo Guangchang, age 47, is the co-founder of Fosun, an $8bn conglomerate in China, which he co-founded with three university friends in 1992, using Rmb38,000 as the company's founding capital. (Today, Rmb6 = 1 US dollar.) Fosun is the largest private conglomerate in China. It has investments ranging from steel to mining, tourism to pharmaceuticals.

The name Fosun means "star of Fudan University", Guo's alma matter and Shanghai's most prestigious academic institution. At Fudan, Guo got a degree in philosophy.  He also honed his business skills by selling bread to hungry classmates when they finished studying at 11 each night. He earned Rmb5 a night, which seems a paltry sum until he points out that his monthly expenses were only Rmb30 at that time.

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Quiz. Calculate Guo's monthly profits from selling bread while in college. Next, express the founding capital for Fosun in terms of number of months of profits. Next, compare the result to the number of years required to complete a college degree. Did the founding capital for Fosun come entirely from Guo's selling bread?

If we assume that Guo sold bread for all 12 months of the year and that his college term lasted 4 years, then his profits from selling bread amount to only 15% of Fosun's founding capital! Derivation: [(Rmb5 earnings/day x 365 days/year x 4 years) - (Rmb 30 expenses/month  x  12 months/year x 4 years)] / (Rmb 38,000 Fosun founding capital) = 15%.

So, Guo must have had other sources of capital.

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