I put my software and IBM together

Simply put, we hate losing what we've got.

People tend to place a much higher value on losses than on gains.

Let's say this is what we assume is how many cupcakes we sell.

And when there is mutual gain, both sides stand to lose more than they would gain if they started a war.

And at least it'll give you a sense of how revenues, gross profit, operating profit, pre tax income and net income really are different.

Minus 500,000.

This is what the owners of the company get before they pay the government.

(Laughter) But I know it's the bottom line, or one's perception of it, that motivates people in the end.

And I won't go into all of the details of an income statement, but any income statement you look at will have this operating profit line.

But here you see it means very, very different things.

Either they are going to unlock an awful lot of economic opportunity and make a percentage on all of it or it's all going to crash and burn, which is tough on their shareholders.

So it will benefit, because you are discounting some of the cash payments.

This is really important to pay attention to, because so many people say, oh, a company made this much.

And each day, the flow of profits and where they go...

I'll just abbreviate that as Nl.

Go ahead, eat.

And when people talk about earnings of a company, this is what they're talking about.

Our interests clash with theirs.

loss of sexual desire .

His death is a great loss.

We really hate it when we have to lose out on some money.

LADY CAPULET So shall you feel the loss, but not the friend Which you weep for.

Kill the goose that lays the golden eggs.

The taxes will be 153,000.

I'm not a charity commissioner.

A benefit to both our worlds.

We are assuming a very simple world, were the is no taxes, we have no debt, we have no intrest or things

So you've probably heard not only the term earnings, you've probably also heard the term earnings per share.

They buy more of your service and they tell more of their friends, which leads to more profit.

And it's really true.

Those 20 dollars might have been a quick lunch.

The idea is that we really hate it when things go into the red.

Or a great loss.

So that's a nice thing to keep in the back of your mind, this return on asset concept, and it's very closely tied to operating profits and the actual assets of a firm.

And that's what these brands did.

FDlC insured.

And that's my dad found that.

The rewards would be... enormous.

And let's say, assume if I inherited this million dollars, I didn't finance it.

He made up for the deficit.

If you move to the right in the X space, then your loss decreases.

Before Interest and Taxes.

So as you see here, if I charge 2.80 and I only sell 300,000, then this is my return on asset right here.

The reason this is happening boils down, in my mind, to one basic problem, which is our inability to perceive the difference between public benefits and private profits.