RE:RE:Random Present Value math...I produce my own garbage for free ... for my investment group where we have
high level fun earning outsized returns. I will at least admit that it doesn't feel good when we have to resign ourselves to being a little more patient than we thought we would have to be,on one or two of our investments. We always re-evaluate the opportunity when things,
on the surface at least, don't appear to be going to plan. There is always a time value to money...but as WB says, the stock market is a vehicle for moving money from the impatient, to the patient.
Which brings me to your comment the other day ...
" I will be a seller I am looking for an exit point " - Gm
I take it that you didn't quite find your exit point yet? .27 not rich enough for you ? Don't discount the tax loss...always quite valuable. But I get it, perhaps not useable in your case. MM
GoldMemberT wrote: Who pays you to write this garbage? It has to be some kind of low level fund.
mercedesman wrote: here's an interesting math problem
If you could choose between two streams of cash:
- $ 1,000,000 a year for the next 15 years OR
- $ 1,100,000 a year for only 14 years, and starting one year later (i.e delayed by year), ...
which would you take? (assume a 5% discount rate for the purposes of this example)
The answer is (using PV analysis) - you would be better off choosing the second alternative.
Now imagine if the second revenue stream was much higher. Say 50% higher, or 100% higher? Then it is an absolute no brainer. You would (should!) pick the second stream in a heart beat !
Of course varying the discount rate can alter the findings somewhat.
And if you're 74 years old, that might influence your decision as well.
Please discuss amoungst yourselves.
MM