Question 1: What is something you believe you can do better or understand substantially better than most people? (Something productive/mildly related to the world please, no balancing on 2 fingers)
Question 2: What is the most important cornerstone to successful investing?
Question 3: On the day of Alibaba's IPO, September 19, 2014, the S&P 500 moved down 0.96 points, why?
Question 4: Seeing that you have some knowledge of the business world, your friend comes to you for an investment advice. Your friend asks "Based on the projected economic trends, should I be long or short the S&P 500 in the next 12-month period?" What is your answer to your friend?
Question 5: Stock A has a beta of 2 and trades at $10. Stock B has a beta of 0.5 and trades at $50. Both stocks are worth $55. Which stock is risker?
Question 6: What is the most important determinant of return? In other words, if you are searching for higher returns, what should you do?
Question 7: Looking at the model below, point out a major strategic mistake the management has been making. As a background, the average enterprise makes roughly 12% return on invested capital, which is reasonably the same rate that investors use as a discount rate in valuing businesses.
|
|
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
|
Minket share
|
30.0%
|
31.5%
|
33.0%
|
34.5%
|
36.0%
|
37.5%
|
39.0%
|
40.5%
|
42.0%
|
43.5%
|
45.0%
|
|
Revenue
|
600
|
643
|
687
|
732
|
779
|
828
|
878
|
930
|
984
|
1040
|
1097
|
|
COGS
|
360
|
386
|
412
|
439
|
468
|
497
|
527
|
558
|
591
|
624
|
658
|
|
Gross profit
|
240
|
257
|
275
|
293
|
312
|
331
|
351
|
372
|
394
|
416
|
439
|
|
SG&A
|
72
|
77
|
82
|
88
|
94
|
99
|
105
|
112
|
118
|
125
|
132
|
|
R&D
|
36
|
39
|
41
|
44
|
47
|
50
|
53
|
56
|
59
|
62
|
66
|
|
Operating profit
|
132
|
141
|
151
|
161
|
171
|
182
|
193
|
205
|
217
|
229
|
241
|
|
Interest expense
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
5
|
5
|
10
|
15
|
|
Pretax income
|
132
|
141
|
151
|
161
|
171
|
182
|
193
|
200
|
212
|
219
|
226
|
|
Tax proNision (20,0)
|
26
|
28
|
30
|
32
|
34
|
36
|
39
|
40
|
42
|
44
|
45
|
|
Net income
|
106
|
113
|
121
|
129
|
137
|
146
|
155
|
160
|
169
|
175
|
181
|
|
Shares outstanding
|
100
|
100
|
100
|
100
|
100
|
100
|
100
|
100
|
100
|
100
|
100
|
|
Earnings per share
|
S1.06
|
$1.13
|
$1.21
|
S1.29
|
S1.37
|
$1.46
|
$1.55
|
S1.60
|
S1.69
|
S1.75
|
$1.81
|
|
Cument assets
|
150
|
203
|
261
|
325
|
396
|
475
|
564
|
664
|
778
|
908
|
1059
|
|
Cuttent liabtlities
|
100
|
135
|
174
|
217
|
264
|
31'
|
3"6
|
443
|
518
|
605
|
706
|
|
Working capital
|
50
|
63
|
87
|
108
|
132
|
15S
|
1SS
|
221
|
259
|
303
|
353
|
|
PP&E
|
200
|
271
|
348
|
434
|
528
|
634
|
752
|
885
|
1037
|
1210
|
1412
|
|
Total operating assets
|
250
|
338
|
435
|
542
|
661
|
792
|
940
|
1107
|
1296
|
1513
|
1765
|
|
Current assets
|
150
|
203
|
261
|
325
|
396
|
475
|
564
|
664
|
778
|
908
|
1059
|
|
PP&E
|
200
|
271
|
348
|
434
|
528
|
634
|
752
|
885
|
1037
|
1210
|
1412
|
|
Intangibles
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total assets
|
350
|
473
|
609
|
759
|
925
|
1109
|
1316
|
1549
|
1814
|
2118
|
2472
|
|
Current hataities
|
100
|
135
|
174
|
217
|
264
|
317
|
376
|
443
|
518
|
605
|
706
|
|
Total debt
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
50
|
50
|
100
|
150
|
|
Total liabilities
|
100
|
135
|
174
|
217
|
264
|
317
|
376
|
493
|
568
|
705
|
856
|
|
Shareholder's equity
|
250
|
338
|
435
|
542
|
661
|
792
|
940
|
1057
|
1246
|
1413
|
1615
|