 A bird in the hand is worth two in the bush. Have you ever heard that saying a bird in the hand is worth Two in the bush. What does that mean? And how does it relate to PayPal? well Buffett says this and he says that It's actually a finance equation and the way to think about it is Treasuries let me see if I can get treasuries This is the yield on treasuries treasuries is the bird in the hand historically If you want a risk-free rate you want the safest return you're going to look at treasuries and they're going to pay Historically seven percent five six seven eight percent Sometimes it pays a lot more and sometimes it pays a lot less. So this is a bird in the hand Why would you ever give up the bird in the hand? Well, because you think you'll you'll make more somewhere else Maybe twice as much or three times as much but something more for the risk so the bird in the hand is treasuries and The two in the bush is something that'll pay out more Okay, so if we look at PayPal This might be the two in the bush And Warren Buffett likes to buy companies When the earnings yield, which is the earnings the company is making for the price It's higher when that number is higher than treasuries Let me just pull up treasuries one more time right now. Treasuries are three point six nine So less than four percent. You can actually get one-year treasuries closer to Foreign change so this isn't You know the rock solid number you want to look at but four to five percent we can say and then we jump back to PayPal and We pull up the earnings yield and it says three point six nine two But this is backwards looking the earnings yield forward is expected to be higher and The way we can pull that up is If we go to seeking alpha and we look at all the Different earnings expected for this year the forward PE is about 12.9 and when I did the math it was almost eight percent So by the end of the year we will look back and most likely say that right now The earnings yield for twenty twenty three will be somewhere around eight percent Okay, so that's a lot more than Treasuries if you look at treasuries, that's three percent almost twice four versus eight and Does that mean the stock's gonna go up? No, not necessarily May not go up may actually go lower right, so I have made previous videos and Technical analysis is showing that hey people are selling we are making lower lows this thing could could go to 40 40 something who knows But fundamentally and I've shown this before as well. It might go higher if you take the earnings From seeking alpha or or any wherever you get your analyst information And you plug those in forward and you give them evaluation You're gonna get some numbers and my math shows that If if PayPal grows over time and gets higher earnings PayPal stock should be worth more. That's all it is. That's all that's all we can do So if it goes lower Okay, we'll have to see why But the business has has a future at least that's what I know what you're saying. Oh Let's look at meta because meta was in the similar scenario At one point when it was getting sold off And I'll just hide this a little bit at one point Meta had a really juicy earnings yield as high as 11 Investors were selling it. They didn't trust the metaverse. There was a lot of issues ads were coming down from a high valuation to a low valuation And if you bought it just because it was cheap and paying more than treasuries Well, this thing almost tripled from 87 to around 270 that's almost a triple Excuse me, so now the earnings yields around 3% isn't that amazing? so it went from low valuation to a Optimistic valuation that happened to PayPal one day That's the question investors are gonna be wondering Is this a stock you just buy and you put away and you wait for a higher valuation sometime in the future? I don't know but no one else can know either. So I guess we'll find out. I Like it for the future Fundamentally, I'm doing as much research as I can to figure out the best that I can but Buying companies that are profitable making money free cash flow positive and waiting For conditions to change That's how you do the bird in the hand versus two in the bush Cheers