Three math ideas to compare apples to apples, or AAPLs to MSFTs

Three math reminders to keep me from letting raw numbers overwhelm my calculations.

1.Rather than dollars, I like to remind myself to look at percentages to compare apples to apples, or APPL to MSFT:) Sometimes, the DOLLAR change in a stock can overwhelm my intuition if I'm not focused.

e.g. Today, NFLX dropped a around $30 in after hours, after BEATING earnings estimates announced after the close today. This is a $3000 change in the intrinsic value of an option contract (that controls 100 shares). It's a lot of money, but only about a 5% drop based on the closing price around $600. A drop like that MAY be well within your pre-defined downside/risk tolerance.

2.I like to calculate the power of steady average gains over time because I like to day dream.

e.g. using a 10 year time frame. Inflation at an average of 3% 1.03^10 = 34%..You would have to earn more than 34% after 10 years just to keep up with inflation.

an average 10% annual gain for 10 years is 1.10^10 = 159% gain

free return calculator here... https://tinyurl.com/AndrewCalculators

3.A sense of scale. Netflix (NFLX) has a market capitalization of about $260 BILLION. Grocery Outlet (GO) has a market cap around $2.6 BILLION. Apple (AAPL) has a market cap of about $2.6 TRILLION. Apple is 10 TIMES as big as Netflix, and 1000 TIMES bigger than Grocery Outlet.

Some free calculators (and data on another tab) in Google Sheets...copy to your own Google account and have fun. I will slowly add more calculators and data as needed.

https://tinyurl.com/AndrewCalculators or full link...

https://docs.google.com/spreadsheets/d/170il4YX8VacPR0hBGgs9isB62eaywiFkF_lVMDyfyDw/edit?usp=sharing

p.s. if you find a mistake, please let me know.

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