Forum Archive Index - June 2001

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

Hi Phaedrus,


>
> Snoopy, your devotion to this stock (because of its good
> fundamentals) has cost you nearly 40% in 18 months. This is
> a big loss, especially since the market went up by over 10%
> in the same period. TLS now must go up by 63% just to get
> back to where it was.
>
>


It's just as well I didn't buy in at the top then isn't is Phaedrus
;-).   I haven't worked out what my average entry price into Telstra 
is, although in truth,  I am probably down.  

Am I concerned?  No, because when I topped up on Telstra I did so 
knowing that the price could fall.  But I also knew that because 
Telstra is a strong performing company it will be back.  Your chart 
shows a downtrend but if you look at the actual company results (eps, 
ROE) and the outlook the only trend is upwards.  This means that the 
downtrend in share price has been caused by a change in *expectation* 
of future performance in the next year or so, not by any actual 
deterioration in performance.  I am not a seller in the next year or 
so.   This means, outrageously high valuations aside, I am quite 
comfortable with the idea of sitting and waiting on TLS at any sort 
of price level within cooee of where it is now.  Your charts may not 
tell you it is close to a bottom, but I will tell you, based on 
fundamentals, it is.




>
>
> I can see the attraction of your approach, though. As the price
> falls, the fundamentals just keep on getting better. You are never
> wrong!
>                              
>


Prices fall for different reasons.  In the case of TLS there has been 
no deterioration in the operating performance.   As long as the 
operating performance remains good, you are correct.  I cannot lose, 
as sooner or later the share price will catch up with the 
fundamentals!   I wouldn't even have much hesitation in buying more 
of this one on the way down (which is where your and my philosophies 
will have to agree to differ).  I've never really fussed too much 
about picking the exact bottom.  It would be nice, but to me the risk 
of buying now, for instance, is less than the risk of not buying 
being away from the market for a couple of weeks and missing the 
turning point.   I'll keep this fish on the line thanks, rather than 
let it go and *hope* to hook it again when it gets a little bigger 
and fatter. SNOOPY

PS  Your use of the word 'devotion' implies that you think I have 
some sort of blind fervour towards Telstra.   If you look on the 
Focus Investment Group, I have posted a Screen 1 Review of Telstra.
I think you will find that I have done my homework on this one.



---------------------------------
Message sent by Snoopy 
e-mail  tennyson@caverock.net.nz
on Pegasus Mail version 2.55
----------------------------------
"Dogs have big tongues, so you can bet they don't 
bite them by accident"


----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/forum.shtml.