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Michael Stoff, Director 305 East 23rd St, CLA 2.102, (G3600) Austin, TX 78712-1250 • 512-471-1442

Fall 2007

T C 357 • Investment Strategy

Unique Days Time Location Instructor
44720 M
2:00 PM-5:00 PM
CRD 007A
Warner

Course Description

This course will use the lives and writings of Warren Buffett and Bill Gates to examine the ways in which great wealth may be accumulated, the social role of business, and options in the field of philanthropy. Warren Buffett not only is generally thought to be the most successful investor of all time; but he is also seen by many as the most significant independent voice with regard to governance of the corporation. On the other hand he has come under attack for lack of inclusion in the board, for not selling Berkshire's stake in Petro China and his avoidance of high tech stocks. Bill Gates also is an iconic and controversial figure. Some of the issues we will examine will include:

1. Whether the corporation's job is to maximize earnings or to serve many social goals?
2. Options for structuring philanthropy
3. Ways of thinking about risk and uncertainty in investment and in life.
4. Executive compensation, Mr. Market, and the inheritance tax
5. The particular issues raised by Microsoft and its roles and Berkshire Hathaway and its practices.

About the Professor

David Warner is the Wilbur Cohen Professor of Public Affairs at the LBJ School of Public Affairs. He teaches courses in Health Policy and Health Finance. He also has been a long time admirer of Warren Buffett and has invested a disproportionate proportion of his net worth in Berkshire Hathaway. He believes this course will provide a fresh look at a number of issues in an accessible and interesting way. And introduce students to some fresh ways of thinking.

Grading Policy

Tentatively I expect each student will do two class exercises in which they formally prepare one side or another of a specific discussion for a particular class in which all will be involved as well as a 15 page paper which will be presented towards the end of the semester. Grades will be based on both class participation as well as the papers.

Texts

Roger Lowenstein, Buffett: the Making of an American Capitalist
Buffett's essays which are the first 20-30 pages of the Berkshire Hathaway annual report all on line at www.berkshirehathaway.com And a variety of other reading from Charles Mungers Poor Charlies Almanack, Kilpatricks OF Permanaent Value; Reports of the Bill and Melinda Gates Foundation. A still to be chosen book on Bill Gates

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