Definition of “Risk” Odds of permanent capital loss   Beta, tracking error, near-term underperformance
Definition of “Growth” Intrinsic value growth, durable moats, compounding machines   Revenue and earnings growth
Value vs Growth Margin of safety:   invest at the intersection of growth and value   Mutually exclusive
Intrinsic Value Scenario-weighted estimate of fair value based on a range of potential outcomes   Price target based on most probable outcome
Time Horizon ~ 5 year average holding period   “outperform this year,“ < 1 year
Concentration 25 – 50 positions   > 100 holdings
Decision Making Students of behavioral finance, exploit manic/depressive nature of the market, aligned incentives   Less rational due to internal and external pressures