Hi, to wrap up this week, I want to again spend a few minutes on the website that we were on. And by the way, finance.yahoo.com has a lot of information, Google provides this information. But if you want to do more precise, thoughtful stuff, Morningstar is a website, morningstar.com. And there, a colleague of mine from Chicago has developed ways of measuring things and so on, which are very refined because remember, its measurement is statistical. And I'll give you those resources they are there in the course website but I just wanted you to know that there are multiple places you can go. Okay. So, let's go to this website we saw. And the reason I'm going there is simply to show you, again, how cool finance is. So we talked about something; we talked about stocks this time. So, remember last time I told you, on top, what are they showing, now look at the first title. It's S & P 500, right? And NASDAQ. I think most of you should be able to kind of google what this means. S&P 500 is a collection of 500 stocks. So it's no different from what we did except it's a portfolio. That sets us up very well for risk and return. And you'll hear the word portfolio coming up over and over again. And I'm very excited about talking about this. In fact, all my research that I have done over the years is on stocks largely. NASDAQ is another index of stocks exchange where stocks trade in a bunch of them, their trading mechanism is slightly very different from New York Stock Exchange, and so on and so forth, okay? And it says over here, after May swoon, be wary of buying into a June bounce. I don't know what the heck that's supposed to mean because [LAUGH] \stories like this just blow my mind. It's almost like the person writing it seems to know what's going on. Nobody does. Let me assure you, when finance theory says you shouldn't be able to know what's going on in the future. That's called essentially the basis of market efficiency and random walk. The notion is this, if S&P 500 is 1311 today it's big for a reason. It's based on what we all collectively know today. So, how could we know anything different than the 1310? If we did, it would be in the price. That's the notion. And whatever happen in the future, it is mostly because of stuff we don't know because it hasn't happened. Of course we make mistakes, but that's not what I'm talking about. Mistakes happen, period. [INAUDIBLE] talking about that. Okay, if you go down, then you'll start seeing, the exchange rate on the right and stuff like that, commodities, bonds, we spoke about. Okay, and so you can pretty much cover the whole news. And here you'll see the most active stocks out there, right. So I don't want to necessarily focus on them but we saw portfolios, now you have price of stocks, right. But let's see, what company were we trying to evaluate the strategy of. Remember it was called Microsoft. So let me just assume that it has something to do another company with soft in its name. So if you want to evaluate Microsoft fundamentally, where do we have to go to figure out the 12% rate of return. Let's assume that Microsoft is a company I would pick just because I thought of the word soft in both of them. What do you have here? You have the price of Microsoft as 29 bucks or so. You have previous prices, you have prices that open, close, you have bid and ask. Bid and ask are slightly different because the person trading has to make some money for the kids, right? So they're always ready to buy and sell. Just to show you some numbers and then we'll take this break, we'll come back to this again is 245.14 billion is the market cap. What does that mean? Market cap means price times number of shares, and that's the total market value of Microsoft as we speak. $245 billion, a lot of money, right? This earnings per share is not the earnings per share I was talking about. I was talking about cash flows per share. This is accounting versus cash flows, remember? Okay, one last thing I wanted to show you was, and we'll do this next time when we go into risk and return and evaluating. It's, there's a key statistics thing, a little link here, where a bunch of stuff is reported in addition to what we just saw. And what I'm going to go, is I'm going to scroll down very gradually and give you some sense of numbers we will do. Look, even cashflows are calculated for you. But I will do these or not. Just confirm what the definitions are, how are they are doing it, and so on. I just wanted to show you one number, look at the debt. You see that 13 billion? Now look at the market cap 245, right? Enterprise value and is lower than the market cap because the difference is just cash setting there, it's called excess cash setting there, right? So the value of the company says 245, let's include the cash. And how much debt? 13, so what is the assumption we made in our valuation till now? Let's just have only equity. Do you deny that's almost true? It's almost 100% true. Many companies know that. So it's not an imaginary thing, but you won't find companies with no equity. Because if you do, that company would've taken the bank for a ride because you have every incentive to take risks because you can walk away if you lose everything but you get all the gains. That's the tragedy for that contract. See you next time. Browse this website. But most importantly, I encourage you to do the assessment assignments. If you stay on top of that, you will not need to relearn finance. Take the time on a weekly basis, and I'm forcing the class to go one week at a time exactly because of this. In fact, if you get tired of listening to me, just take a break and do some problems. They are organized in an increasing difficulty level. And doing problems, assessments, not just those in the video, is the only way to learn finance. See you next week and have a good time.
