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Apple since 2003

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Microsoft: Up 25,000%since IPO in 1986

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Microsoft loses 11% on 4/28/06

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Bill Gates loses over 3 Billiondollars in one day 4/28/06

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Bill Gates is arrested forreckless driving

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Bill Gates $113 Million HouseBill Gates $113 Million House

Most expensive residential house ever built. The $1.4 millionguest wing has two bedrooms, 2 bathrooms, & its own dinning room.

http://www.usnews.com/usnews/tech/billgate/room12a.htm

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Pool:Pool: $6 million, 60-foot long, complete with a waterfall and itsown underwater stereo system. 12 bathrooms12 bathrooms.. 3 kitchens3 kitchens.

LibraryLibraryhas 10,000 rare books including da Vincis 72 page$31 million scientific notebook.

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Bills garagegaragehas 3 Porshes,1 Mercedes, 1 Jaguar, 1 Ford Mustang,and a Ferrari. His other $1.2 million garageother $1.2 million garage will hold 30 cars.

Bill can jump off excess energy in his trampoline roomtrampoline room with20-foot high ceilings.

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Michael Dells HouseMichael Dells House

Most expensive house in Texas. 33,000 square feet, with 8 bedrooms,Most expensive house in Texas. 33,000 square feet, with 8 bedrooms,

8 baths, and 13 baths. The yearly property tax bill for this house is8 baths, and 13 baths. The yearly property tax bill for this house is

$250,000.$250,000.

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Consider that he made this money in the 25 years orso since Microsoft was founded in 1975. If you

presume that he has worked 14 hours a day on every

business day of the year since then, that means he'sbeen making money at a staggering million dollars

per hour, around $300 per second.Which means that if, on his way into the office,

should he see or drop a $1000 bill on the ground,it's just not worth his time to bend over and pick it

up. He would make more just heading off to work.

Bill Gates Opportunity Cost of stopping and

picking up money on the street

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Bill Gatess RestroomBill Gatess Restroom

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Billl Gates hit with a custard pie

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Lucent Technologies: Ouch!

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GENERAL MOTORS: OUCH!

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Which car is more expensive?

$5,000$8,000

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Which stock is more expensive?

Whirlpool at $67 a share or

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Or Maytag at $27

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To find out which is moreexpensive

You need to understand the P / E ratio, orthe PRICE TO EARNINGS RATIO.

This is what matters, not the stock price

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PE RATIO FORMULA

Stock Price---------------- = Price to Earnings RatioEarnings per Share

27

--------- = 12 P/E Ratio2.18

The price you are paying for Maytag is 12times earnings!

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Another way to look at the PEformula

M (Multiple) X E (Earnings) = P (Price)

M X E = P

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WHIRLPOOLS PE RATIO

$67-------------- = 11 PE RATIO

6

WHIRLPOOL

PE = 11MAYTAG PE = 12

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WHIRLPOOL (AT $67 A SHARE, ISACTUALLY THE CHEAPER STOCK: Ittrades at 11 TIMES EARNINGS)

Maytag at $27 is the more expensive stockwhich trades at 12 times earnings and ismore expensive. But..

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Maytag is growing its earnings at 9% a yearand Whirlpool is growing at 5%

Most investors would argue since Maytag isgrowing twice as fast, its PE Ratio should betwice as high Whirlpools.

So Which stock is really Cheaper?

MAYTAG, even with its higher P/E Ratio,because it is growing twice as fast!!

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Maytag is more likely to produce a Win.

Maybe the line, or PE Ratio is wrong

Always compare the P/E of a Company toits competitors, or cohort, and the average

of the S & P 500.