Capital Allocation - Steward Your Wealth

Last time I ran three legendary investors through the halal screen. The response told me to keep going. So this month, one investor — and a special one.

Li Lu runs Himalaya Capital. If that name doesn't ring a bell, this will: Charlie Munger gave Li Lu his own family's money to manage. Munger, who almost never trusted an outside manager with a cent, called him a once-in-a-generation talent. Li Lu is about as close to the Buffett-Munger bloodline as a living investor gets.

I ran all 14 of his holdings through the same screen I use on my own portfolio.

Nearly half of his portfolio is off-limits to a Muslim investor.

The 43%

Pinduoduo — 14.7% of the fund. This one hurt, because on business quality it scored 94 out of 100, the highest of anything I've screened. But it's sitting on a cash-and-securities pile north of 30% of its market cap, which breaks the AAOIFI-style balance-sheet screen. A brilliant business you still can't own as-is.

Berkshire Hathaway — 13.4%. Li Lu's third-largest position is Munger's own company. And Berkshire fails on business activity — its engine is insurance, which carries the gharar and riba problems every halal investor knows — plus the same cash-ratio breach as Pinduoduo. The protege holds the mentor's company, and the mentor's company doesn't pass.

East West Bancorp — 9.3%. A regional bank. Conventional banking is interest-based lending at its core, so it goes to a manual review that almost always ends the same way: skip.

Bank of America — 4.6%. Fails every financial check at once — business activity, debt, and cash. No ambiguity here.

H&R Block — 1.6%. Fails on interest-bearing debt above the limit.

Add those up: roughly 43% of one of the most respected value portfolios in the world is off the table before a Muslim investor even gets to the question of price.

Say it plainly

Li Lu is a far better investor than me. Munger staked his own money on that judgement. None of this is a knock on his skill.

It's the same lesson as last month, just louder: the best investor in the world is solving a different problem than you are. He never had a halal constraint. You do. His portfolio was never built to survive your screen, and it doesn't.

You cannot outsource this. There is no manager whose picks you can simply mirror, because not one of them is filtering for what you have to filter for.

What actually passed — and was cheap

Here's the part I want you to sit with, because it's the useful half.

Of the names that cleared the halal screen, three were also trading below my fair-value range — meaning quality and a reasonable price, the combination that's actually rare:

Tencent Music — passed clean, scored 75, trading well below fair value.
S&P Global — passed, scored 72, modestly below fair value.
MSCI — passed, scored 66, below fair value.

(As always, the financial-data names — S&P Global, MSCI, Moody's — earn a business-activity note worth a closer look at revenue mix, but they're a very different animal from a lender.)

And the one everyone asks about: Alphabet. Li Lu has nearly 45% of his fund in it across both share classes. It passes the halal screen and scored 89 on quality — genuinely excellent. It's also trading about a third above my fair-value range. Same verdict it earned last month: a wonderful business at a price that gives you no margin of safety.

The takeaway

Passing the halal screen thins the field by nearly half in a portfolio like this. Adding the valuation test thins it again. What's left — permissible and well-priced — is a short, honest list you can actually build on.

That's not a limitation. That's the discipline doing its job.

Don't copy Li Lu. Learn how he thinks, then run every name through your own screen — because your screen asks a question his never had to.

Every stock, every time, both lenses.

Wa alaykum salam,
Rizal

I ran all 14 through the Barakah Stock Check app — halal screen, six quality scores and a fair-value range in about ten seconds per ticker. It's free for three days if you want to run your own watchlist: barakahprofits.com/stock-check

Educational content, not financial advice. The halal screen is an automated estimate — confirm compliance with a scholar-reviewed screener before you invest. Holdings from Q1 2026 filings; positions change.