Michelle, let me give you two actuals:
First T. My wife inherited some T from her mother around 20 years ago. Since then, it has spun off the baby bells, LU, NCR and ATI. The NY Times ran an article on the buy and hold of T assuming you held all of the spinoffs, starting at the time of the breakup of AT&T. They calculated that assuming you reinvested dividends, the annual rate of return would have been around 17%. I redid that calculation this morning (because I was still jumping up and down about the ATI buyout) and discovered that as of this AM, using the German price for ATI and US prices for the rest of the stocks, the annualized return has been around 21% (can you imagine T actually behaving like a growth stock??)
Second, TYC. I bought this in 1986 at around $6. It is currently trading at around $75. My holding period is 12 1/2 years. Neglecting dividends my annual rate of return has been around 23%. If you include dividend reinvestment that increases to about 24%.
These are not startling results, but they handily beat most funds. I don't think these are anomolies at all.
I choose not to play greater fool games, so I avoided the biotech craze of a few years back, and I avoid the internut craze that's going on now. Ultimately, stock prices must be supported by cash flow, and I don't see the cash flow in most of these outfits (I think AOL may be the exception).
TTFN,
CTC |
