8 million shares and got 7200 million The MOS Market Cap was half of that

8 million shares and got 7200 million the mos market

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multiplied $220 per share times 32.8 million shares and got $7,200 million. The MOS Market Cap was half of that number—she rounded to $3,600 million. Was her Payback Time valuation higher or lower than the MOS price? She referred to her previous Payback Time Valuation of $1,450 million, $44 per share versus the MOS price she’d just figured out of $3,600
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million, $110 per share. She saw that her two valuation methods were a long way apart. She and Doug decided to keep it conservative and go with the seven-year Payback Time price per share of $44, and $44 became the new Stockpile Price. By October 2008, the general market meltdown took CMG with it, in spite of CMG’s earnings continuing to grow. The Connelleys watched the price drop below $44, at which time they had a “discussion”: Susan: Honey, we have over $100,000 in cash. We should put at least half of it back in CMG. Let’s buy another 1,500 shares. Doug: Now? Susan: Now. Doug: Okay, honey. And so they did. As the price bounced off the $40 Floor, they stockpiled another 1,500 shares at $42—a total investment of $63,000 plus a $10 commission. They now owned 2,000 shares of Chipotle. PORTFOLIO RESULTS FROM AUGUST 2006 TO OCTOBER 2009 In October 2009, Doug and Susan had $45,000 in cash in their brokerage account. That included the $38,000 they had contributed from their jobs since 2006, plus the $80,000 they got when they sold enough shares of CMG and BWLD to get their original investment back, less the $10,000 they put back into BWLD in 2008 and the $63,000 they paid for CMG in October 2008. Plus they had 2,000 shares of CMG that they valued at $220 per share (worth $440,000) and 1,961 shares of BWLD they valued at $95 (worth $186,295 total). The Mark to Market Valuations were determined by multiplying the number of shares of stock by the stock price in the market on the day they created the balance sheet. By saving, using FACs, and stockpiling a wonderful business when the price was right, Doug and Susan had increased the value of their portfolio to between $275,000 and $633,000, up from $78,000 in 2006. They achieved a compounded annual return of between 48 percent and 92 percent on invested capital. But they were still a long way from their goal of $2.6 million by 2023.
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Here’s a look at the Connelly’s Balance Sheet in October 2009, with two types of analyses of their financial situation: Mark to Market and Estimated Value. Mark to Market uses the current price of the asset in the market to determine the asset value. Estimated Value uses an informed estimate of the value of the asset as the asset value. Return on Investment was calculated with the return consisting of cash and stock value but not including additional cash saved from the Connelly’s jobs. DOUG AND SUSAN LOOK AHEAD One night in late 2009, Doug and Susan did a little fun calculation. How long, they asked, would it take to grow their $275,000 portfolio (based on current market prices) to $2.6 million if they could keep going at a 48 percent rate and if they kept adding $1,000 per month? The answer was five and a half years. They looked at each other. They could be retired in 2015 with $2,600,000. They might not have to wait until 2023. They realized Mr. Market’s fears were directly responsible for their
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