Which stock is better? Exciting Boring.

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Presentation transcript:

Which stock is better? Exciting Boring

Shares outstanding 5,247,000,000 1,498,000 Price per share $141.05 $33.39 Market capitalization $740 billion $50 billion 2016 earnings $46 billion $9 billion Earnings per share Price / earnings $8.33 ≈ 16.9 $6.00 ≈ 5.6 Dividends per share Dividends / earnings $2.28 27% $1.52 25%

Investment advice

Jim Cramer vs. Leonard the Wonder Monkey

The Wall Street Journal’s famous dartboard experiment

The case against market efficiency

Buffett’s performance, 1956-2016 Buffett: +34.7% per year $1,000,000,000 Market: +9.9% per year $10,000,000 $100,000 Value of $1 invested from 1956 - 2016 $1,000 $10 $0 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

How can we explain Buffett?

The Infinite Monkey Theorem Borel (1913)

The right strategy: diversify (own a little bit of everything)