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Saturday, October 11, 2008

Beer a Better Investment Than AIG, Lehman, and Fannie Mae

The conventional wisdom says to invest long-term in stocks. In the short-term, there are occasionally alternative investments that may perform better --

1. AIG (AIG,
NYSE) traded at $68.59 on 10/1/2007.
It traded at $3.95 on 10/1/2008, for a 94.2% loss.
$1000 of AIG invested on 10/1/2007 would be worth $58 on 10/1/2008.

2.
Lehman (now Lehman Brothers Holdings, Inc. since entering bankruptcy proceedings,
LEH, NYSE) traded at $63.65 on 10/1/2007.
It traded at $0.21 on 10/1/2008,
for a 99.7% loss.
$1000 of Lehman invested on 10/1/2007 would be worth $3 on 10/1/2008.

3. Fannie Mae (FNM, NYSE) traded at $62.49 on 10/1/2007.

It traded at $1.66 on 10/1/2008, for a 97.3% loss.
$1000 of Fannie Mae on 10/1/2007 would be worth $27 on 10/1/2008.

However, current Budweiser prices for a 12-pack of cans are about $9.00. This works out to $0.75 per can.

$1000 invested in Budweiser (beer, not stock) would get you 1,333 cans, each having $0.05 California Redemption Value. Upon redemption, you would receive $66.65 for all of the cans, and have the pleasure of drinking the beer.

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