Let say in the summer of 2000 that you had $1000 to blow. You may wonder "What should I spend this nice wad of
cash on?" Any college student's first thought is "BEER!!!", but once his/her senses kick in, they think, "Well, maybe a nice
stock option..." (yeah, right...).
Which one would have generated the most return? Well...
July 26, 2000:
$1000
Nortel Networks stock: $35 transaction cost + 7 shares @ $123 ea.
BEER: 33 cases x 24 = 792 bottles = approx. 15 bottles/week
*In the year between July 26, 2000 and July 26, 2001, Nortel stock plumeted due to layoffs etc.*
July 26, 2001:
Nortel: 7 shares @ $12 ea. = $84. $84 - $35 transaction fee = $49
BEER: 792 x 10 cents/bottle refund = $79.20
In this instance, college
instincts work to our advantage. Never let it be said that the young don't know how to
invest...