whatdat wrote:
What does a lens have to do with it? All transactions involved a goat.
Think of it as a different goat, if that makes more sense to you. It doesn't matter what the things bought and sold are, just that there are two transactions, $10 profit on each.
I thought that buying and selling a lens might put a little photography humor into the analysis.
Rich475
Loc: North of San Francsico
A man buys a goat for $60
He sells it for $70
At this point he has made $10 profit
But now he must pay $80, an extra $10 to buy it back which wipes out that profit.
He sell it for $90 or, $10 more than he just paid for it, so his profit is $10
Lets have a look from the other side:
Man has a goat & 20$
20$ + goat
Sells the goat for "60"
20+60=80$
Buys the goat back for "70"
80-70=10$ + goat
Sell it again for "80"
10+80=90$
Buy it again for "90"
0$ + goat
He lost 20$ on the whole transaction which was gained by the other guy.
-----------------------------------------------
Or most probably this way:
Guy has goat & sell for $60
Guy have $60
Guy wants milk so went to buy the goat back.
But 60 not enough because seller wants $70
Guy borrows 10 from bank and add to his 60 to buy goat.
Guy now have a goat and bank debt of $10
Goat is male, no milk so Guy sell it for $80
Guy have $80 but is now hungry for meat
Guy wants to buy goat but the buyer already butcher it and will only sell for $90
Guy borrows again another $10 to add to his $80 and bought a piece of goat.
So now Guy has 12lbs of goat and $20 of debt.
But is not actually true because to borrow $10 from a bank, Guy really needs to borrow $10.2
He gets the 10 and bank keeps the 0.2 as upfront interest payment.
So he really owe the bank $20.4 for the two borrows.
But he choose 12 months payment so he would actually pay the bank $40 for the compounding interest.
So in reality, in the end, Guy has a 9lbs of goat meat, 3lbs of goat bones and $40 debt.
StanMac wrote:
I have $60 in my wallet. I spend that $60 for a goat. I sell the goat for $70 - I've made $10. Then I buy the goat back for $80 (I had to dip into my savings for extra $10) So I am down $10, negating the $10 gain I made on the first sale. I then sell the goat again for $90. I recovered the $10 I lost on the second sale, so I have made only $10 on the series of transactions. I have invested $80 in the goat and got only $90 for it.
Stan
I say it goes like this:
You actually invested 140 in the goat (60 + 80) and you actually received 160 (70 + 90). You have 20 more than you started with.
Or try it another way:
Let’s say you have 100 and you buy the goat for 60.
You now have 40.
You sell the goat for 70.
You now have 110.
You buy the goat back for 80.
You now have 30.
You now sell the goat for 90.
You now have 120.
You started with 100.
You now have 120.
You have 20 more than you started with.
Call it more, call it additional, or call it profit.
Doesn't matter what it was - there were two purchases and two sales. EOS.
john451
Loc: Lady's Island, SC/Columbia, SC
$20. Two entirely separate transactions with a $10 profit on each.
whatdat wrote:
But, he lost $10 between transactions, leaving $10.
He didn't lose $10 when he bought back for $80.
Rich475 wrote:
A man buys a goat for $60
He sells it for $70
At this point he has made $10 profit
But now he must pay $80, an extra $10 to buy it back which wipes out that profit.
He sell it for $90 or, $10 more than he just paid for it, so his profit is $10
Rich,
I think the same way as you on this, it's got to be $10 unless there's a trick???
philmurfin wrote:
Rich,
I think the same way as you on this, it's got to be $10 unless there's a trick???
He ends up with $20 more than he started with. That’s his profit.
BebuLamar wrote:
He didn't lose $10 when he bought back for $80.
He ends up with $20 more than he started with no matter how you look it. Call it a “gain”, call it “more”, call it “profit”. He’s up $20.
The trick in the goat market is selling higher than you bought. This goat farmer seems to have mastered the art. In each trade he's up over 10%
twosummers wrote:
A man buys a goat for $60.
Then he sells it for $70.
Then he buys it back for $80
And sells it again for $90
How much profit did he make?
Mmmmm, I wonder?
No Googling or asking a nearby child....
Again in a different way;
60+10=70 70-8o= -10 +90= 80
Started with 60 now has 80 = +20
marquina wrote:
$20 profit. $10 from the first transaction and $10 from the second transaction.
I agree. The two transaction pairs are separate events.
I wonder how many pages twosummers will get out of this little math problem . . . .
Stan
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