Sure you've all seen or heard this one but thought it was worth printing in the kitchen, particularly seeing how I know Sharcky loves a good beer story:
On July 26, 2000, two friends Jim and John, each got a $1000 bonus at work. They both work for Nortel Networks where in the summer of 2000, there was lots of extra money around for mid-year bonuses.
Jim, being an intelligent, financially conscientious person, put the whole $1000 into Nortel Networks stock. With his $1000, and transaction costs of $35, he was able to purchase seven shares at $123 each. Having watched the stock climb and climb, he felt very good about this investment, happy about this investment, happy he was preparing for the future.
John, being a more carefree sort, did something slightly different with his bonus. John went to the Beer Store where he purchased 33 cases of beer. John also felt good about his investment: 33 cases of 24 is 792 bottles of beer!
John also being intelligent guy, although perhaps not as forward thinking as Jim, calculated that he could drink about 15 bottles per week, and he wouldn’t need to buy beer for a whole year.
Jim of course was appalled by John's purchase and berated him constantly about it.
As months went by Jim, excitedly watched the stock prices and saw it start to dwindle. "It'll go back up,” he'd say.
John who was reaping the benefits of his investment on a daily basis would reply, "Yah, it will. Hang in there buddy. Burb."
Months went by, and Jim's stock had fallen to about half if it's original value, and John's beer was about half gone. Jim sure the stock had hit rock-bottom, still was berating John for his frivolous purchase, telling him "Your beer will be gone in six months! Who knows what my stock will be worth!”?
Well, summer 2001 has come and hard times at Nortel continue. Both John and Jim have been laid off. In order to raise cash to help through the rough time, Jim sold his seven Nortel shares that day’s value of 12$ got $84 and then after paying the $35 transaction fee, he had $49.
Jim stopped by John's house later that day and as luck would have it, there were two bottles of beer left. John being a good friend, offered to share his last two bottles of beer with Jim.
Jim appreciated the gesture and enjoyed the cold beer on the hot summer day, but he felt a bit guilty, "At least I got 50 bucks back out of it - you have nothing now.”
That's OK, replied John, perhaps you could lend me a hand. I need to return all these empties, he added as his other friend with a truck pulled in. So they loaded up the truck, and proceeded off to the beer store they unloaded the empties and, John went to the counter and collected his refund for the bottles. Well the friendly beer store clerk said as he handed the money to John 33 cases at 10 cents a beer, “That comes to 79.20.”
Jim was speechless, if he'd put his $1,000 into beer and spent a year drinking he would have come out with $30 more then buying NT shares.
Got to love that one… CHEERS! |
