I have to agree with Vladimir on this one - T looks weak in the near term, which is what counts for me. Today's price action looked lousy, couldn't quite get to $37 and then falling back to $36 1/8 - especially on another record high for the Dow.
As far as 10-20 years from now, I fully expect all 3 - Intel, Microsoft, and AT&T to be around. Personally, my "surest" long term pick would be Boeing, for that matter.
The main question longer term is what the total investment return will be. Dow stock Bethlehem Steel is still a major player in steel, yet has fallen from $60 in 1958 to under $9 today. Former Dow component (until 1991) Navistar (formerly International Harvester) is even worse, having lost 98% of its share value over the last 30 years. And Navistar is still #1 in market share for the heavy and medium truck business, makes a great product.
I'm not saying I think this will happen to big T, no way. I just don't think we should get complacent and assume that being "giant" or "surviving" automatically means big returns for the shareholders. Management needs to be forced to run the business for the benefit of the shareholders. Otherwise, it will be run for the benefit of (surprise)- management. Personally, I hope enlightened money managers like Michael Price (who liked the stock earlier this year) will put AT&T management's feet to the fire, and force them to deliver. They should, and T shareholders will get the strong return they deserve. Otherwise, it could be a long 10-20 (or 30) years for the shareholders. This is why the stock is weak right now, because there is some doubt as to whether management is serious about growing shareholder wealth. Once that has been PROVED, T should rise nicely, but until then - well, read Vladimir's comments. |
