What if I told you that China had a hundred-year head start on European colonial dominance and threw it away? What if the largest naval fleet in human history, 300 ships, 28,000 men, reached three continents and was deliberately destroyed by bureaucrats who thought it was a waste of money? What if one of history's greatest builders, a man who created trade networks spanning from Africa to Indonesia, was erased from the record because the people who came after him didn't understand what he'd built? This is not speculation, this happened. In 1405, nearly a century before Columbus, a Chinese admiral commanded a fleet that made European exploration look like a scouting party. His flagship was five times larger than the Santa Maria. His fleet reached East Africa, mapped the Indian Ocean, and established diplomatic relationships with over 30 kingdoms. He built infrastructure that should have lasted centuries, trade routes, supply depots, relationships, a tribute system that made participation profitable for everyone involved. And then, within years of his death, it was all destroyed. The maps were burned, the ships were dismantled, it became illegal to even build ocean-going vessels. The Europeans who came later were not discovering new routes. They were following the maps that China had abandoned. This is the story of Zhung Hu, a castrated slave who rose to command the greatest fleet in history, who built a network that could have changed the world, and whose legacy was erased by the very people he served. And this is about what his story teaches us about first mover advantage, network effects, sustainable competitive advantage emotes, and the political risks that can destroy everything you build, even when you do everything right. I'm Ari Van Gemeren, real estate investor, fund manager, and your host today for the Timeless Investors Show. And today we're going to dive into one of the most incredible and unknown stories in history, brought to you as part of our builders series, focusing on great builders of past and present and how we can take their stories and make ourselves better investors, more understanding of risk, more understanding of timeless principles that undergird our system of seeking and building something timeless. And I have to apologize in advance to any of the listeners who understand the pronunciations. I'm doing my best, but the names are a little more foreign for me, but I'm going to do my best. So before we dive into Zhung Ho's story, let me set the stage for just how extraordinary this was. When we think about the age of exploration, we think about Columbus, Magellan, Vasco da Gama, when we think about your European ships discovering the world in the 1500s. But here's what a lot of people may not realize. China had already done it nearly a century earlier, at a scale that makes European exploration look like a scouting mission. And the numbers are nearly unbelievable. Kung Ho's first expedition in 1405 had 317 ships, 800 men. Columbus's voyage, when he sailed the ocean blue in 1492, three ships, 90 men. For context, these ships were larger than any European vessel until the 1800s. Some modern naval historians debate whether ships at large could even have been seaworthy with medieval technology, but the Chinese records are detailed and consistent across multiple sources. This wasn't just exploration, guys. This was infrastructure building at imperial scale. And the man who commanded it, his story is even more remarkable than the fleet who comm the fleet itself. Dong Hu was born in Mahe, Mahu, in 1371 in Yunnan province, southwestern China. His family was Muslim. His father and grandfather had both completed the Hajj to Mecca, a journey of thousands of miles that demonstrated both wealth and devotion. But Yunnan was on the frontier of the Chinese Empire, and when Mahe was 10 years old, the Ming dynasty conquered the region. He was captured, and like many boys taken in conquest, he was castrated and made a eunuch servant. Common practice for creating loyal court officials who could not establish their own dynasties. Think about that for a moment. At age 10, this boy lost everything, his freedom, his family, his future as it would have been. He was sent to serve in the household of Judi, a prince and military commander. And this is where the story starts to get really interesting because Mahu didn't just survive, he thrived. He proved himself brilliant in military strategy. He was physically imposing. Some records suggest he was over six feet tall, which was exceptionally rare for the time on any continent. He was loyal, capable, and utterly dedicated to Zhu Di. So when Zhu Di launched a civil war to seize the throne from his nephew, Ho was on his side. The campaign was brutal. Multiple battles, palace intrigue, years of conflict, but they won. And in 1402, Zhu Di became the Yongle Emperor. And one of his first acts was to promote Mahu and give him the honorific title, Zhonghu, and place him in command of something unprecedented, a treasure fleet that would project Chinese power across the known world. This is a rags to riches story on an almost unimaginable scale. A boy from a conquered province, an ethnic and religious minority, castrated and enslaved at the age 10, rose to command the largest naval force in human history. The modern parallel would be like if a refugee kid who was castrated became both Jeff Bezos and the head of the U.S. Navy combined. And here's the first investing lesson. Talent and loyalty compound when given opportunity. Zhu Di didn't just reward Zhang Ho for past service. He gave him resources to build something that would expand the empire for generations. He invested in capability, not just connections. True meritocracy, by the way, true meritocracy, which, total side note, I took a long course in college on China. And one of the most fascinating aspects of Chinese culture was the importance of a large exam that people would sit for. And it was like a real opportunity to rise from nothing to something great, the value of education, hard work, and true meritocracy. And this man is a great example. So between 1405 and 1433, Zhung Ho led seven major expeditions. Let me walk you through what was actually built. The first voyage was massive, the aforementioned numbers. The fleet visited Java, Sumatra, Sri Lanka, and India. The stated purpose was diplomatic, announced the new emperor, established trade relationships, and bring back envoys who would acknowledge Chinese superiority. But what Zhengho was really doing was building infrastructure. And, I will add, feels very similar to what China is attempting to do today across this entire region. At each port, he established relationships with local rulers. He mapped harbors, currents, and wind patterns. He set up supply depots and repair facilities. He left behind Chinese communities who would facilitate future trade. This wasn't just a voyage, it was the first phase of network construction. And when he returned, he brought envoys from over 30 kingdoms to Beijing. The message was clear. China is open for business, and we have the capability to reach you anywhere. Investing lesson one, first mover advantage in relationship building is massive. Zhung Ho wasn't just establishing trade routes, he was defining the terms of engagement before anyone else could. The second voyage went deeper into India, reaching the Kingdom of Calicut, a major trading hub. But this voyage also revealed something important about Zhonghe's strategy. He was willing to use force, but only to protect the system he was building. When a Chinese pirate base in Sumatra threatened trade routes, Zhenghe crushed it, not as conquest, but as infrastructure protection. Think about this in modern terms. Amazon doesn't just build warehouses, it fights counterfeiters, it blocks bad actors, and it protects the marketplace. The infrastructure only works if it is secure. Zheng He understood this 600 years ago. Investing lesson two, protect your supply chains. Infrastructure without security is just a target. Stay on top of it. The third voyage was the first time Zheng He commanded multiple fleets simultaneously. He was delegating, building systems, creating standard operating procedures. This is when the tribute system really started to take shape. And this is where Zheng Ho's business model becomes fascinating. Here's how the tribute system actually worked. Local kingdoms would acknowledge the Chinese emperor as superior. They would send periodic gifts and envoys, and in return, China would provide protection, trade access, and gifts. Here's the interesting part. China typically gave more in gifts than they received in tribute. European observers later noted this and thought the Chinese seemed like idiots. Why would you give away more than you receive? But Zhenghe understood something they didn't. He was buying the network. By making the deal attractive, kingdoms wanted to participate. There was no need for conquest. There was no need for occupation costs. There were no local resistance. It was voluntary because the economics worked for everyone. This is Amazon's playbook. Again, lose money on prime shipping to own the customer relationships. Zhung Ho was willing to lose on individual transactions to own the trade network. Investing lesson three. Sometimes the best investment is the one where everyone wins. Imagine that. Sustainable competitive advantage comes from making your partners successful at the same time as you. The fourth voyage is where things really get remarkable, as if they haven't been remarkable enough yet. Zhenghe reached the coast of East Africa, modern-day Somalia and Kenya. This was the first direct contact between China and East Africa. The fleet reached Hormuz in the Persian Gulf, visited Arabia, and mapped the East African coast. And here is a detail that captures the absurdity of the scale. Zhenghe brought back giraffes. The Yangol Emperor thought they were Quilin, mythical Chinese creatures that appeared when a wise ruler governed justly. The giraffe became proof of the emperor's virtue. But beyond the symbolism, think about what this voyage represented. Geographic diversification had started to create asymmetric and information advantages. Zheng He now knew trade routes, harbor deaths, seasonal winds, and political structures across three continents. No European had this knowledge. No other Asian power had this reach. In modern terms, this is like Bridgewater's radical transparency and global intelligence network. Information asymmetry is alpha. Investing lesson four: the more you know about markets others haven't reached, the more opportunities you see that they cannot. I would make a corollary to say being in your own market and investing in your own market as a real estate investor that you genuinely understand is information asymmetry and power, right? We see this, we see this happening in all of our markets right now. We're here, we see it, we know what's happening, it gives us a huge opportunity. The fifth voyage revisited the African coast and strengthened existing relationships. When Zhonghe returned, 18 kingdoms sent tribute missions back to China. That's relationship maintenance. In modern terms, customer retention, keeping in touch with the customer, knowing what they want. The first voyage was acquisition. The fifth voyage was proving that the system works, that relationships are sustained, and that the network is reliable. Investing lesson five, relationship maintenance is recurring revenue. The customer you already have is worth more than the one you haven't yet acquired. By the sixth voyage, the system was mature, multiple fleets operating simultaneously, standardized procedures, supply chains that ran themselves. Some historians believe this voyage actually reached Australia, though that is debated. What is not debated is that Zheng Ho was now operating a global network with minimal central oversight. He had built a machine. You can probably guess, investing lesson six, at scale, you can be everywhere at once, but only if you build the systems, you don't run a hero operation. My company is in the process of moving from hero operations to scale and reproducibility. It is a process. There's a lot to learn from Zhenghe's story. The seventh and final voyage was launched when Zheng Ho was 60 years old. He reached over 20 countries, reinforced relationships, and brought back envoys. He died on the return journey, likely near the coast of India, and he was buried at sea. And here's where the tragedy begins, because Zheng Ho had built a system that should have outlived him. He had created infrastructure, he had established relationships, he had trained officers, and he had documented procedures, but he couldn't protect it from politics. So here's what happened after he died in 1433. The Yongul Emperor, Zheng Ho's patron and protector, died in 1435. The new emperor was heavily influenced by Confucian scholars who had always hated the treasure fleet expeditions. Why did they hate them? First, the cost. These voyages were expensive, and the Confucian bureaucrats saw them as wasteful extravagances. Second, ideology. Confucian scholars believed China had everything it needed. They saw maritime trade as beneath Chinese dignity, something for merchants and barbarians, not a proper emperor. Third, power. The eunuch admirals, like Zheng He, represented a competing power center. Confucian bureaucrats wanted to be the only advisors to the emperor. So in 1436, the new administration made a series of decisions that would change world history. They burned Zheng He's logs, maps, and records. They dismantled the treasure fleet. They made it illegal to build ocean-going ships with multiple masts. They turned China inward for the next 400 years. Think about what was lost. Detailed maps of the Indian Ocean, African coast, and Southeast Asia, trade relationships with 30 plus kingdoms, maritime technology that was a century ahead of Europe, infrastructure that had taken 28 years to build, knowledge that could have and probably would have given China global dominance. Within 50 years, Portuguese explorers were sailing the routes Zheng Ho had mapped. They were discovering places that had been on Chinese maps for decades. The Dutch, Spanish, and British followed. They built colonial empires on the network China had abandoned. This is one of history's great what-ifs. What if China had maintained the treasure fleet? What if they had kept building on Zheng Ho's infrastructure? The modern parallel, and there's many, are painful to consider. Xerox invented the graphical user interface, the mouse, and the laser printer in the 1970s. Their own executives didn't even understand what they had. Steve Jobs walked through Xerox Park, saw the future, and built Apple. China had a hundred-year head start on global maritime dominance. They threw it away because bureaucrats who had never left Beijing decided it wasn't worth maintaining. This is the ultimate investing lesson and timeless lesson for all civilizations. Political risk can destroy everything you build, and it often comes from inside, not outside. In fact, if there was a timeless refrain to the stories of imperial rise and fall that we have studied over the course of the Timeless Investor Show, articles we produced, everything we've done, it is this. The death of great civilizations comes from inside, not outside. So let me pull these together. Let's go back through the lessons and let's talk about how they imply apply to modern investing. So lesson one was first mover advantage compounds. Zhenghe built and established relationships and infrastructure that gave China access to markets no one else could. That advantage could have compounded to the benefit of China for centuries. But first mover advantage only matters if you maintain it. In real estate, this is why we focus on supply-constrained markets. The barriers to entry, geography, zoning, political opposition do create a moat, but you have to maintain your position. You can't just build and walk away. In private equity, this is why Blackstone obsesses over relationships with limited partners. First mover advantages in capital access compound as well, but only if you nurture and maintain those relationships. Lesson two, scale can create unstoppable momentum. 300 ships showing up is a completely different game than three ships showing up. When Columbus arrived in the Caribbean, he negotiated from weakness. He did still triumph, to be clear, and we have covered Spain's extensive triumph in the New World many times on this show. When Zhengha arrived in Calicut, he negotiated from overwhelming strength. Scale isn't just about efficiency, it's about changing the nature of negotiations. In modern terms, when Berkshire Hathaway shows up with$100 billion in cash, sellers take the call. When a small fund shows up with$10 million, they're one of 100 bidders. If you have a capital advantage, use it. Go big enough that competition can't respond. This is part of the reason our firm focuses on mid-market sized buildings. We believe we have an asymmetric advantage in what we're buying because we have capital advantages versus many of our competitors who bid on the same style of building. We have a moat in short in the areas where we play. Lesson three. Zheng Ho's tribute system was voluntary. It cost less, it created willing partners, and it could have been sustained indefinitely. The modern parallel, in my opinion, is something again like Berkshire Hathaway. Buy good businesses and leave management alone model works much better in the long term than private equity's strip and flip model, right? You know the model. Buy something, leverage debt, saddle it with an enormous amount of debt, carve the staff in half, and then try to flip it for a profit. What good does that create for anybody? When you force a deal through leverage and aggressive restructuring, you create resistance. When you make the deal attractive for everyone, it is sustainable. Lesson four, information asymmetry is alpha. Zhungho's maps and knowledge were worth more than all the treasure he brought back. He knew wind patterns, harbor deaths, political structures, and trade goods across three continents. That information was worth kingdoms. This is why Ray Dalio obsesses over information flow, why Bridgewater built a global intelligence network, why Renaissance Technologies hires physicists and mathematicians. Alpha is knowing what others don't. In my business, this is why we study supply constraints, entitlement timelines, and zoning regulations in markets other investors ignore. We build on-the-ground relationships. We work to develop information asymmetry. We want to know what deals are distressed, where the opportunity is, and how we're going to get it faster than our competitors. That information advantage compounds over time. Lesson five, systems outlast individuals, living or dead, if you let them. Zhenghe built a system that should have run for centuries after his death, but new leadership destroyed it because they didn't understand its value. This is a secession planning problem that destroys family businesses, investment firms, and empires. If your wealth is built on you, it dies with you. If your wealth is built on systems, it can compound across generations. I like to think about the Walton family as a clutch example of this. Many, many, many wealthy families go the cycle of three. The first generation builds it, the second generation maintains it, the third generation loses it. What distinguishes the Walton family's success, right? They have built a system around passing ownership, that ownership is sacrosanct, and a distributed command network so that nobody can ever liquidate or sell their shares. The family is ignored and built into a culture of ownership and long-termism. That is why they've been so successful. And that's why they're still here. And that's why other great builders in history have nothing left. The Vanderbilts are a classic example of this. They built something great, and the next generations were not trained in running it, and they lost everything. Lesson six, hard one, and a big one for today. Political risk can and will destroy everything. This is the hardest lesson and the most important. Zhunghe built something incredible, but he couldn't protect it from bureaucrats who didn't understand what they were destroying. In modern terms, you can build a great rent, a real estate portfolio in a place like Venezuela, and it can be taken away from you overnight. You can build the best business, but regulatory changes can kill it. You can build generational wealth, but the government will and can reach into your pocket and take it from you. This is why diversification, once you achieve great wealth, isn't just about asset classes. It is about jurisdictions, political systems, and time horizons. This is why family offices, particularly non-U.S. family offices, hold assets across multiple countries. This is why sophisticated investors think about permanent capital and asset protection, not just high returns. This is why we field calls all the time from family offices outside the United States looking to park capital here. Why? They're wealthy and they know that our legal system, as flawed as it is in many ways, will protect their assets. And that's why the United States is a beacon for investment in infrastructure and a place to place capital. You are not just building your wealth, you are protecting it from people who might not understand its value. So, what would Junghood do today? Let me translate his principles into modern investment strategies. First, he would build permanent infrastructure, things that create a recurring value. In real estate, this means controlling all the aspects of your business, right? Owning the best properties, controlling the management, controlling the contracting, controlling the mechanical work that goes into it. In private equity, frankly, this means building portfolio companies with sustainable competitive advantages, not just building financial engineering for a quick flip. I will hammer this point and I will do additional episodes on this. It's such a legitimate and powerful point, guys. Modern private equity doesn't create value. I said it, I stand by it. Infrastructure thinking compounds, transaction thinking extracts and doesn't last for the long term. Second of all, make your partner successful. Okay, it's not just about you. The tribute system Zhunghe built worked because it was a good deal for everyone. Kingdoms participated voluntarily because they benefited. In modern investing, this is the Berkshire model. Buy good businesses, leave good management in place, and provide the capital and support and let them run. It's why Costco succeeds where other retailers fail. They make suppliers successful, employees successful, customers successful. Everyone wins, so the system is sustainable. Home Depot is another good example of this. If you haven't read the founder of Home Depot's book, I highly recommend it. It's incredible, definitely worth digging into. It was a whole premise on making your employees part of the culture. Henry Ford did this. I just finished Henry Ford's book. I'm going to do an episode on it eventually. Henry Ford paid more than everybody else. He made sure his employees were well taken care of, that they had an excellent situation set up. And Ford did really, really well for a really long time. Arguably they forgot about this at some point. And then you've seen what happens since. Here's the key thing: if you're extracting value from every relationship, you're building your home on sand, not solid ground. If you're creating value for everyone in the network, you are building your home on solid rock foundation. Information advantage over brute force. Today this means spend time understanding markets that others ignore. Study the supply dynamics. Study your market. Be deep into it. Okay. There's a fantastic book I highly recommend to anyone, written by the father of my former boss, Ken Fisher, Philip Fisher. His book is called Common Stocks and Uncommon Profit. Philip Fisher was a very big fan of owning like five to seven stocks at max and deeply, deeply understanding your companies. He had a fantastic term called scuttle butt. Understand the scuttle butt. And the way he would do it, he would go to the competitor. So if you like in an example, he's investing in a bank, right? He'd go to a competitor bank and he'd be like, tell me about Union Bank. What is it like competing with them? What is it like, you know, whatever? And then they would be like, oh, they're great at this and they're bad at this. And he always said, you get the best information from the competitors because they'll tell you all the negative things, but they'll also tell you the part of it that is really difficult. Information asymmetry, critical. Protect what you build. Zhengho crushed pirates. He intervened in civil wars when they threatened trade routes. He used force strategically to protect the system. In modern terms, legal structures matter. Asset protection matters. Succession planning matters. Insurance matters. Don't skimp out on it. Protect what you built. You are building your defenses on your empire against the Confucian bureaucrats who want to burn it down. And lastly, think in decades, not quarters. If there is a timeless principle that I could not get more behind, it is long-term thinking and all-style of investing. The treasure fleet and the infrastructure that Zhenghe built took 28 years to build. The relationships took decades to mature. The infrastructure was meant to last centuries. Then bureaucrats who thought in terms of annual budget destroyed it all. This is the fundamental tension in investing. Short-term thinking kills long-term value. If you're managing to quarterly earnings, you'll make different decisions than if you're building for 50 years. This is a reason Berkshire doesn't give earnings guidance. It's why family offices think generationally. They think in 100-year investment increments. It's why we focus on cash flow and supply constraints instead of cap rate compression and quick flips. Time is the investor's greatest advantage if you are patient, wise, and prudent enough to use it. Jungho's story is one of the greatest in human history and one of the most tragic. A castrated slave who rose to command 300 ships, who built a network that spanned three continents, who established trade relationships and infrastructure that could have given China global dominance for centuries, and then watched it all get destroyed by bureaucrats who did not understand what they had. The lessons for modern investors are clear. If you're building something meant to last, you're not just building for yourself. You're building for the next generation and the generation after that. That's what Zheng Ho did. That's what the great builders throughout history have always done. And that is the premise of our builder series. What timeless principles can we take to learn in this fast-paced TikTok world of quick of quick hits and quick dopamine rushes? We want to go back to fundamental principles. And these fundamental principles are what separate wealth that compounds from wealth that dissipates over time. If you enjoyed this deep dive into Zhung Ho's life and investing lessons from his treasure fleet, subscribe to the Timeless Investors Show. We release episodes every week exploring the builders, the empires, the crashes, the villains, all of the different things across 5,000 years of recorded human history that give us timeless principles to drive long-term wealth creation. You can read more analysis like this on the Timeless Investor Substack. Just Google the Timeless Investor. We dominate the front page. It's all there for you. And if you're an accredited investor interested in supply constrained real estate with structural modes, the kind of infrastructure investing Zheng ho would understand, reach out to me directly. Thank you. Think well, act wisely, build something timeless.