Looking at the rates, I discovered one joy of traveling in New Zealand: you can basically divide prices in New Zealand dollars in half.
He uses a simple ratio consisting of the stock's current price divided by the price six months ago.
The arbitrage has to do with the fact that the earnings yield on equities (earnings divided by price) is often more than the aftertax cost of money (which is, roughly, two-thirds of whatever your long-term interest rate is).
But rents generally rise in line with inflation, so the percentage yield (income divided by price) is steady, whereas bonds pay a fixed income, so if inflation falls, and hence bond prices rise, the percentage yield falls.
It has divided the price of a Big Mac by the average net hourly wage in cities around the world.
Mr. Metcalfe had wanted to buy a boat, but when he divided the price by the amount of time he would spend on it, the idea seemed crazy.
As a matter of simple algebra, it is the inverse of the equity earnings yield (earnings per share divided by price).
After finding a company that would charter a jet for two thousand dollars, he divided the price by the number of seats, borrowed a blackboard, and wrote, "Virgin Airways, $39 single flight to Puerto Rico".
"Once I divided the price by four and added back a little, I was often astounded".
By "yield" here I mean the earnings yield, or earnings divided by price.
