To Limtex:
We are experiencing a mindless overreaction to the so-called Long-Distance war between the telecoms. Mindless, witless,however we label it, the share price is hammered because of investor perception. One would think that informed investors would realize that WCOM generates a minor amount of revenue (5% I believe) from consumer long-distance charges, versus 56% for AT&T, and yet investors have taken the share price down over 20% in the last 5 days.
The fundamentals of WCOM's business plan remain intact, and I regard this as a fantastic opportunity to nibble at the stock. Where is the bottom? I haven't a clue, but in this unfriendly environment the price will not turn around on a dime; it will settle out, consolidate, test the bottom once or twice, and after Greenspan comes down from the summit on August 24th with his Commandments re interest rates,, I expect the market to exhale in relief and start a slow, painful climb back up.
This evening, I will consult my charts, read the tea leaves, stir up some chicken entrails and come up with my best guess of where the major support level might be. (It's called Technical Analysis.) But as I said, I will be a buyer, a timid buyer at that, but nibbling at WCOM down to 70, and perhaps a bit lower. Stay tuned.
Robert S. Sheldon
For the record, I am heavily long WCOM and have sold covered calls recently. |
