That when you just talk about price to earnings or market capitalization when you just looked at market capitalization, it looked OK.

Capitalization

Market capitalization.

Watch your capitalization!

That's the market capitalization of the company.

Earnings ratio of 4.

Short for market capitalization the market cap of the company

Earnings based on 2009 estimated earnings.

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.

Price to Earnings of 10.

Abby's earnings plus Ben's earnings are 50.

This is Earnings Per Share, not total earnings.

So this is 350,000 of earnings.

So I made 2 of earnings.

10 times earnings.

Price to Earnings.

Why isn't it 9 times earnings or 12 times earnings?

So based on 2008 earnings, the price to 2008 earnings for

Because when someone says earnings, are those the earnings last year?

We use 2008 earnings.

Price to Earnings ratio.

What are forward earnings?

For every dollar of earnings, you're paying 4.

Now, what were the earnings of the company?

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

but that the ownership of this capital, the way the capitalization happens, is radically distributed.

For every dollar of earnings here, you're paying 10.

For every dollar of earnings here, you're paying 10.

So it has a Price to Earnings of 50.

So 10 price to earnings.

Are you using historical earnings?

Are you using future earnings?

Net income is also earnings.

If our earnings are 350,000.

redistributing wealth versus confiscating earnings.

Earnings was 350,000 in 2008.

This 2 were my earnings.

Why would they rather pay 10 for every 1 of earnings in 2008, as opposed to 4 of every dollar of earnings in 2008?

They just look purely at the equity value or the market capitalization.

Remember our tokens are going to use all capitalization, just as convention.

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

So for every dollar of earnings per year, if you believe that the 2008 earnings are indicative, you're paying 4 here.

The deterioration of corporate earnings has yet to bottom out.

All of our earnings actually fall down straight to equity.

So now if you do a Price to Earnings on 2010 earnings so this is 18 months out from when this video is being made all of a sudden, your Price to Earnings relative to 2010 earnings is 4 for Company A.