Complete the following written assignment and submit a typed PDF (3–5 pages)
addressing each question in depth. Be sure to cite any financial statements, shareholder letters, or
articles used.
Part 1: Conceptual Understanding
1. In your own words, explain the difference between value investing and growth investing. How does Buffett’s strategy blend the two?
2. Define the concept of “Circle of Competence.” How would you apply this to your personal investing approach?
3. What are economic moats, and why are they essential in Buffett’s valuation framework? Provide at least two types with examples.
Part 2: Financial Analysis
4. Choose a publicly traded company that you believe Buffett would consider investing in.
Include:
– A brief business overview
– Three years of key financials (Revenue, Net Income, Free Cash Flow)
– ROIC, Debt-to-Equity, P/E ratio, and P/B ratio
5. Perform a simple intrinsic valuation using either a DCF model or owner earnings approach. Show your assumptions and whether the company is trading at a discount.
Part 3: Critical Thinking
6. Buffett often says, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Using the company you’ve chosen, explain how this quote applies or doesn’t apply.
7. Reflect on how your understanding of Buffett’s philosophy has evolved since Week 1. What is one belief or bias you’ve had that has changed?
