And I think you already get the sense that the lower the

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

Proportion

Proportional Bias

Ratio

Anyway, I want to leave you there.

let's actually talk about this for a second.

We have a minus fifteen apples.

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

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

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.

I actually haven't used white.

I'll do apples in this reddish color.

There are four boys, four boys and seven girls. That's what this ratio tells us.

Golden ratio

This is a pretty profitable business, more profitable than most.

Our interests clash with theirs.

I don't want to think about, are they good at getting low interest?

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.

Image to text ratio

That's what I start off with.

Keep ratio

Keep Ratio

Interest rate

Kill the goose that lays the golden eggs.

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

So let me switch colors just to ease the monotony.

A benefit to both our worlds.

I'll just abbreviate that as Nl.

Or I could also write it as five eight, just like that.

Go ahead, eat.

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

Coupon rate

Market interest rate

And that's my dad found that.

OK, that's interesting.

Well let's go back to the farm example.

It's just a faster way of saying

And, of course, as I mentioned, this cost has corresponding benefits.

You move these two triangles over here together into a single triangle. It looks like this.

And that's what these brands did.

FDlC insured.

The rewards would be... enormous.