Well done for making it this far in the course. I know it's been a challenging journey, but I hope it's also opened your eyes to new ways of looking at business. You'll be pleased to know that this week is all about revision. There's not much new content. We will focus on implying the theories to small example and cover some of the more difficult techniques, including annuities, perpetuities, net present value, and how to turn profits into cash flows. Before we start, I want to make clear that many of these theories that we've learned are fundamental, but not basic. Even the smartest professors and fund managers disagree about some of these fundamental theories. Take net present value, NPV. If the NPV of buying an asset is positive, that's because the asset is likely to be under-priced. It's cheap. If the NPV of buying an asset is negative, that's because the asset is probably overpriced. It's too expensive. Making good financial decisions boils down to that. Buy under-priced assets, since the NPV of buying them is positive and sell overpriced assets since the NPV of doing this is also positive. Hence the saying, buy low, sell high, but which assets are under-priced and overpriced? Well, I wish I knew if I did, I wouldn't be a teacher. I'd be making big money. As my friends like to tease, "Those who can't do teach." This question of which assets are even under-priced, is extremely difficult to figure out. In fact, recently in 2013, three professors Eugene Fama and Lars Hansen and Robert Shiller were awarded the Nobel Prize in Economics for their empirical analysis of asset prices. What's funny is that two of them, Fama and Shiller, have totally opposing views. Robert Shiller thinks that asset price bubbles occur frequently due to human behavioral biases, such as overconfidence. For a long time, Shiller has tried to predict asset price bubbles. He's fellow Nobel laureate, Fama defines an asset bubble as an irrational strong price increase that implies predictable strong decline. In March 2000, at the peak of the dot-com boom in US text stocks, Shiller famously published the book, Irrational Exuberance, outlining why he thought the dot-com boom was a bubble that might soon burst. That very same month, the US Nasdaq tech index began to crash. That's an impressive prediction. However, Eugene Fama totally disagrees. He doesn't think that asset price bubbles even exist at all. He believes that it's impossible to detect asset price bubbles before they happen. The dramatic price falls occur due to surprisingly bad news. Since news is random, asset prices are random. In fact, this is a legitimate theory and it's got a name, the Random walk hypothesis. Stock prices randomly bounce up and down as news is randomly, good and bad. If you're struggling to get your head around these so-called fundamental concepts such as NPV evaluation, you're not alone. Don't feel discouraged by some of these difficult content. The professionals find it really hard as well. Let's get started on the next video, where we'll hatch a plan and start a business. Until then.