Li Ka-shing, the world’s wealthiest 87-year old, has accumulated many lessons over the past seven decades as he built a plastic-flower maker into an $80 billion empire. Below are five pieces of advice that the chairman of CK Hutchison Holdings Ltd. shared during an hour-long interview with Bloomberg TV’s Angie Lau earlier this month.
Li says the phrase, plucked out of the millennia-old Confucian manual I Ching, or the "Book of Changes," is his life motto. Simply put, it means that one should work hard without sacrificing righteousness. Li works hard—given he works 16-17 hours a day, he’s said he’s effectively more than 100 years old. Li’s also a big philanthropist, estimating he’s given away a third of his assets to his charity to help build schools, hospitals and places of worship.
The son of a primary school principal, Li quit school as a youth to escape Japanese invaders but he never stopped reading. During wartime, he bought a collection of teaching manuals to learn because books were so cheap they were being sold as firewood. When he started out making plastics as a young man, he’d religiously read a monthly U.S. trade publication called "Modern Plastics" to learn about the industry. Nowadays, he reads books that are related to his life and businesses.
Li is among Asia’s top angel investors. He says he’s invested in nearly 60 companies in the field of new technologies and that he’s always on the prowl for disruptors who could shake up industries or even the world. He invested in Facebook Inc., Siri before it was acquired by Apple Inc., and Spotify Ltd. Though he wouldn’t disclose what his next investments would be, he brought up artificial intelligence three times during the interview.
Forget gross merchandise volume, return on equity or debt-to-equity ratios. The most important metric in business is cash flow, according to Li. The tycoon says he’s been keeping an eye out on cash flow since he became an entrepreneur more than six decades ago. One needs to generate good cash flow before expanding into other industries and to store up some insurance for a rainy day, he said.
Rainy days are coming for Li, one of the U.K.’s biggest investors, after Britain voted to leave the European Union. Though Morgan Stanley cut its stock-investment rating on Li’s flagship CK Hutchison this week because of Brexit headwinds, the broker lauded the company’s ability to generate positive free cash flow across all its businesses.
As Hong Kong’s wealthiest resident, Li has much at stake in the selection of the city’s chief executive in March. When Li was in the chief executive selection committee in 2012, he supported former Chief Secretary Henry Tang, who lost out to Leung Chun-ying. Leung went on to serve as chief executive during the student-led 2014 pro-democracy protests that paralyzed the city and his approval rating fell to a record in May. Though Li didn’t mention Leung in the interview, he said Hong Kong’s in the worst shape he’s seen in the past 20 years.