So let me switch colors just to ease the monotony.

Uh, when I started farming,

It's just a faster way of saying

700 rads per shot. (Laughter)

looks neutral.

Maybe it goes to 2 in 2010.

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

So a lot of people immediately will figure out the Price to

So in 2013 you'll be making 16.

Today, there are 2.3 million.

This is 2009 estimates.

And B is expected to make 4 per share.

That was a bit of a diversion.

Why wouldn't I just pour all of my money?

And you're going to pay a lower Price to Earnings ratio if the company isn't growing.

The price here, Company B was more.

If I'm paying 10 today for 2 of earnings in 2009, the Price to Earnings of 5 for Company A.

That's still way more expensive than most companies.

You're making 10 , and that's just to connect the dots.

It was 10.

So it has a Price to Earnings of 50.

And let's say Company B made 5 per share. 5 EPS, Earnings Per Share.

Are you with me?

Price to Earnings ratio.

Divided by 0.35.

What do you know?

And the earnings on the bank account in that year were 200.

But in the last four years,

So just when you look at it superficially right here, when you take Price to Earnings and actually just as a little aside, whenever someone says the Price to Earnings ratio is 10, or the Price to Earnings for Company B is 4, the first thing you should ask is, what earnings are you using?

One is, you could kind of flip this.

If it's growing 100 a year for 20 years, this is actually a very good deal.

Let's say that we don't know that they're truly equal.

But you say, no but these guys are growing so fast in 2011 they're going to make 4.

We didn't say we're going to send a man 20 percent to the moon.

But when you lower the Price to Earnings you are increasing the Earnings to Price.

But this could happen.

So based on that, this looks cheaper.

But here, the Price to Earnings for 2009 then becomes let's see.

last year we earned about 20 odd million dollars, spent about 13 million, with over a 40 percent EBlTA.

So growth is the other reason why you're willing to pay a higher Price to Earnings ratio.

So this is kind of a Sal special ratio, but it's a useful one to think about.

You know what the growth in per person income has been in the United States in the last six years?

It's hard to compare one Price to Earnings in one industry to another.

Obviously a 6 Price to Earnings of 20 times 2013 earnings isn't as good as a 6 Price to Earnings of 2010, because earnings in the future aren't worth as much as earnings today.

And that would happen very quickly in today's public markets.