Friday, October 10, 2008

Beer as an Investment

This is from a forwarded email and I don't know how to verify it, but it does sound pretty accurate.
  • If you purchased $1,000 of shares in Delta Airlines one year ago, you will have $49.00 today.

  • If you purchased $1,000 of shares in AIG one year ago, you will have $33.00 today.

  • If you purchased $1,000 of shares in Lehman Brothers one year ago, you will have $0.00 today.

  • But, if you had purchased $1,000 worth of beer one year ago, drank it all, then turned in the aluminum cans for recycling refunds, you will have received $214.00.


Anonymous said...

It's pretty easy to verify, go to Yahoo Finance, pull the stock prices from one year ago (adjust for any stock splits, dividends, etc.) and compare to the current trading or non-trading price today. Just a hint.

Anonymous said...

Guh? In what world can you buy 4,280 beers with $1,000? I'm apparently living in a place that's too expensive. You can buy cans of beer for less than a quarter each?

Time on my hands ... said...

I took the liberty of doing the math for you, using closing prices on 10/10/07 and 10/10/08.

DAL closed at $19.63 last year. $1000 would have bought you 50.94 shares. (I'm keeping two decimal places even though it doesn't entirely make sense.) 50.94 shares multiplied by this year's closing price on Oct. 10 means your DAL shares are worth $307.16 (truncating the decimal, not rounding).

AIG closed at $68.53 last year. $1000 divided by that would have bought you 14.59 shares. Multiply that by this year's closing price on Oct. 10, and you've got $33.99 worth of AIG. Unless my math is wrong, the email you have was pretty close as far as AIG, but way off with regards to Delta Airlines.

As for the beer, let's say you bought $1000 worth of (cans of) beer and cashed in the deposits to make $214. Deposits are either 10 cents or 5 cents. If deposits are 10 cents, you needed to have 2,140 cans of beer. Spending $1000 to get that much beer means it cost you about 46.7 cents per can, which is probably reasonable if you buy crap beer on sale.

On the other hand, if you have a nickel deposit, you'd need to have 4,280 cans to get $214 back. That means you'd have had to have paid 23.4 cents per can of beer, and I'm not sure that's possible even with the worst quality beer.

I know it's the idea of the email that matters and not the actual numbers, but it's such a stronger argument if the numbers at least work.

Time on my hands ... said...

Oh -- but I didn't adjust for splits, etc. I just did down-and-dirty math, and possibly that accounts for the discrepancy with Delta's numbers. Anyone know? (Or, for that matter, anyone care?!)

Guy Fawkes said...

I know a place that will sell me a gallon jug of brand-name, shitty draft beer for $1. It isn't But hey, the cops are buying it too, so I don't think they're going to shut it down.

Also, their gallon jugs are crafted from the finest aluminum. I've also heard that Tyler Durden only sleeps one hour per night.

$10 via Paypal to anyone who can name, on the first attempt, the only true sentence written in my comment above this paragraph.

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