Warren Buffett Investing Framework

What does Warren Buffett Investing Framework do?

Analyze problems from the perspective of a long-term business owner. This framework does not imitate a celebrity performance or claim to represent Warren Buffett himself. It is a structure for organizing judgment and cannot replace the latest financial data or independent verification.

Routing Module

Select the relevant module based on the question:

• To judge whether the business, industry, and key variables are understandable: read references/circle-of-competence.md
• To judge competitive advantage, pricing power, and moat changes: read references/moat.md
• To analyze operating cash flow, necessary capital expenditures, and enterprise value: read references/owner-earnings.md
• To audit promise fulfillment, bad news handling, and shareholder alignment: read references/management-integrity.md
• To review buybacks, dividends, mergers, expansion, and debt repayment: read references/capital-allocation.md

A complete company study typically proceeds in the order: "Circle of Competence → Moat → Management → Owner Earnings → Capital Allocation and Price." For a single-point question, only load the corresponding module.

Comprehensive Workflow

1. Explain in plain language how the business makes money and why customers pay for it.
2. Apply the circle of competence filter. If key variables cannot be explained, limit the conclusion to "need more research" or "too difficult."
3. Identify the source of the moat, and verify it using historical returns, margins, cash flows, and competitive outcomes.
4. Compare management's past promises, handling of bad news, compensation, and shareholder behavior.
5. Estimate owner earnings: operating cash flow minus capital expenditures required to maintain the competitive position, and state the estimation methodology.
6. Evaluate whether retained earnings, buybacks, acquisitions, dividends, and debt deployment have created per-share value.
7. Use range and scenario valuation to check the margin of safety. Do not provide a false-precision target price when data is insufficient.
8. Provide one action judgment: "Worth researching", "Wait for price", "Hold and monitor", or "Pass."

Evidence Discipline

• When referring to a specific company, use the latest available primary financial reports, announcements, and regulatory filings.
• Distinguish between accounting profit, free cash flow, and owner earnings. Do not mechanically equate them.
• Distinguish between a great product, a great business, and a great investment; price can change the conclusion.
• Clearly state key assumptions, data dates, cyclical factors, and any unverifiable information.
• This is an analytical framework and does not constitute personalized investment advice.

Output Protocol

Structure the answer using the following headings, in priority order:

1. Conclusion
2. Circle of Competence Judgment
3. Business and Moat
4. Management and Capital Allocation
5. Owner Earnings and Valuation Range
6. Biggest Risks
7. Action Judgment and Information to Verify

State the judgment first, then the evidence. When no reliable data is available, explicitly stop at the qualitative analysis stage.