Forum Archive Index - June 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Peter,
>
> 
>My comments, and those of Thaedrus, about TLS were based solely from
>a reading of the chart - the result of that interaction between
>sellers and buyers. 
> 
>We made no mention of the fundamentals.
> 
>

Sure, but my point was a chart can't tell you everything.  In 
particular, it can't tell you when the uptrend will start in advance.

>
> The conclusion was if one wanted to buy TLS why not wait until the
> downtrend had finished and a definite uptrend had started.
>

Because I don't want to stare at a computer screen for days, weeks or 
months just to see the worm turn.  There is more to life than staring 
at share prices on a computer screen!   And I think TLS is close 
enough to the bottom 'for me'.   But if you think you can buy at a 
better price then go for it.

> 
> On the downside they have found out that Australia is not immune to
> the global view of the telecommunications sector. 
> 

True, but I see this as an upside.  I *like* buying in gloom.

>
> Another factor is that until Telestra become fully privatised they
> are exposed to being treated like a political pawn.
>

And the upside to that is that they are government guaranteed.  
Swings and roundabouts.

> 
> As Telstra have reported they will not being achieving double digit
> growth this year. Many analysts are saying that the likes of
> Telstra may never achieve the growth they have experienced in the
> past for some time - or ever again. 
>

If that turns out to be so, then the current plunge in share price 
reflects that new expectation.  If they are wrong then Telstra is due 
for a bounce.

Either way, it doesn't make sense to sell out now, unless you think 
things are going to get worse.  I don't.

>
>  Subdued demand and diminishing
> margins are a problem with these telcos globally. Even the 'heroic
> US consumer' isn't buying as many mobile phones as they used to.
> 

Might be true globally, but isn't true at Telstra.   And I am buying 
Telstra, not a mixture of global telecos.

> 
> 
> No doubt the Telstra price will be a lot higher sometime in the
> future - but when is the question.
> 
>

I'm not planning to sell out in the next 2-3 years, so for me this 
question doesn't matter.

>
> Irrespective of what the fundamental value of Telestra is, why buy
> their shares now when the price is trending downward. All the
> indications are that it will continue to do so for a while.
> 


Because I believe the downward trend is over.   The argument that 
Telstra is trending downward now so is likely to continue to do so 
for the indefinite future doesn't wash with me.  I don't invest on 
the basis of trend line extrapolation. SNOOPY


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"You can tell me I'm wrong twice, 
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