Beer vs. Stock

A Tale Of Two Buddies
In October 2000, two friends, Jim and John, each received a $1,000 bonus from their employer, Nortel Networks. Jim, being a financially conscientious person, put the whole $1,000 into Nortel Networks stock. He was able to purchase 15 shares at $63.25 each (plus transaction costs). Having watched the Nortel stock climb and climb, he felt very good about this investment, happy that he was preparing for the future.

John, being a more care-free sort, did something different with his thousand bucks. He went to the Beer Store and purchased 34 cases of beer. John also felt very good about his investment: 34 cases x 24 = is 816 bottles of beer! John calculated that he could drink about 15 bottles per week, and he wouldn't have to buy beer for a whole year.

Jim, of course, was appalled by John's purchase, and berated him constantly about it. As months went by, Jim excitedly watched the stock price, and saw it dwindle. "It'll go back up," he'd say. Meanwhile, Jim, who has been reaping the benefits of his investment on a daily basis, would reply, "Yeah, it will. Hang in there, buddy" (burp).

As the value of the stock continued to fall, there was beginning to be a noticeable dent in the beer pile. Jim, being sure that the stock had hit rock-bottom, still was berating John for his frivolous purchase, telling him, "Your beer will be gone in six months! Who knows what my stock will be worth!!"

Well, summer came and went, and hard times at Nortel continue. Both John and Jim lost their jobs in the last round of layoffs. In order to raise some cash to help through the rough time, Jim sold his 15 shares, at that day's value of $5.40, and got $81. Jim stopped by John's house later that day (everyone needs a friend during rough times), and as luck would have it, there were two bottles of John's beer left. John, being a compassionate friend, offered to share his last two bottles of beer with his friend. Jim appreciated the gesture, and enjoyed the cold beer, but he felt a bit guilty.

"At least I got 81 bucks back out of it. You have nothing now," he said. "That's ok," replied John. "Maybe you can help me return all these empties." So they loaded up the empty bottles and proceeded to the Beer Store. John went to the counter to collect his deposit on the bottles. "34 cases x 24 bottles, at 10 cents per bottle, that comes to $81.60," the friendly Beer Store clerk said to John as he handed him the money. Jim was speechless.

How would you feel if you just discovered that over the course of the last year, your $1,000 stock investment left you with $81, and taking same $1,000, buying beer, and drinking it, would leave you with that much plus 60 cents? We'll leave it up to you to come up with your own "moral to the story."

Нивы и УАЗики страшно ломучие. Два в починке - на одном катаешься.