October 27, 2010

UNL Finance Students Experience Warren Buffett First Hand

UNL College of Business students have a unique opportunity when they enroll in Finance 463. It’s a chance to experience first-hand the investment strategies of world renown analyst and former UNL business graduate Warren Buffett. Not only do students complete projects that attempt to simulate Buffett’s valuation techniques but they also get to meet Buffett on an annual class trip. UNL Finance professor Dr. Donna Dudney currently teaches the class and believes there are a variety of reasons why it’s one of the most intriguing classes offered for students.

“When students go up to visit Buffett the thing that I'm always impressed about is a lot of the questions that students ask Buffett are not questions about investing at all,” said Dudney. “They are questions about life -- the mistakes that he's made, the guidelines that he would make for students as they start their careers, and how he decides to donate his money. All the gamut of questions and the answers to those questions are the ones that students remember. So it's not just the investing advice that they get from Buffett but it's really more life advice.”

Students in the class do group projects based on Buffett’s methods. First they examine the stocks Buffett currently holds and analyze why he bought them. Then the students pick their own stocks and put together a portfolio of stocks that they think best use Buffett’s methods of selection as well as evaluating whether they are good companies. At the end of the semester the groups make recommendations based on tracking their portfolio for the duration of the class. Dudney has seen an excitement in the students to put their research into action.

“The stocks perform quite well. Buffett's methods work. And so for the students it gets them a leg up if they want to put their own real money behind it. They have a set of real stocks that they can start with. I ask them how many are already doing investing on their own and about two thirds of the hands usually go up.”

What separates the Finance 463 course from others is the focus on a singular clear directed vision for choosing stocks that Buffett has laid out over the years.

“What Buffett does which I think is unique is that he's able to take a complex topic and he's able to make it really common sense and effective for students. Students come away with the sense that this isn't as hard as I thought it was and I really could do this. When they take a traditional investment class they sort of get caught up in all the math and analysis, and Buffett's approach is very refreshing and simple but also is very proven.”

The course which came about four years ago was originally the idea of a graduate student who had an interest in Buffett. Since Buffett graduated from UNL it seemed like a perfect fit. To help prepare for their project-based research, students read annual reports and letters to shareholders that Buffett has put together over the years.

“The students contrast how Buffett's investing methods work with how investing is done by traditional investment analysts. We do a compare and contrast at the end. The students that elect to take the course are really interested in investing. It's not a required course and it's not an easy project to do. They want to go see Buffett but they are also really interested in investing and that's why they take the course.”

If you would like to review the course description for Finance 463 or for any of the other Finance courses visit our Course Descriptions web page: