Buffett's own arithmetic
Earnings per share and the price/earnings ratio are each grown at their historic pace, then multiplied into a future share price.
Which of the 3 would Warren Buffett buy?
Three real companies, one simple test: project earnings and valuation ten years out and see which one still beats 15% a year.
The 15% threshold
One of the three projects an annualised return above 15%. The other two fall short — sometimes only just.
Real, nightly-refreshed numbers
Projections are built from cached fundamentals and price history for roughly 500 worldwide equities.
Growth compounds, valuation follows
The appeal of this back-of-the-envelope method is that it forces two questions at once: how fast can this business grow its earnings, and what will the market pay for those earnings later? A rich valuation can be forgiven when earnings compound hard enough; a cheap one is no bargain when profits stagnate. Playing the three-way version trains you to feel which combination actually clears a demanding hurdle rate.
Frequently asked questions
What is the Warren Buffett stock quiz?
You see three real companies. One of them projects an annual return above 15% using Buffett's growth math on earnings per share and price/earnings ratios. Pick that one before the clock runs out.
How is the 15% rule calculated?
We take each company's earnings per share and price/earnings ratio four years ago and today, grow both at their historic rate for ten more years, multiply them into an estimated future share price, and compare it with today's price to get an annualised expected return.
Is it free to play?
This is a premium game. Every player can try the free Ultimate challenge, which mixes rounds from all games.