George, you are correct in assuming that the need is there.
An earlier post made reference that some "so called" authority pooh poohed Internet Telephony in Barrons this weekend.
With any new technology you will have one camp singing praise and laying down predictions regarding the untapped markets, while at the same time you will have another camp talking about the lack of features, the limited markets, the cost effeciencies, yada yada yada.
These are the usual barriers that one can expect. It happened with desktop PC's in the early 80's, every MIS dept. head put up red flags, saying they never saw any future for such low performance equipment.
Truth is they saw the PC as a threat to their very positions, that they would lose their power. Then IBM introduced PC's, and the MIS dept had to accept the possibility that PC's held a future in the corporate workplace. Afterall what were they going to tell their bosses, that IBM the same people that make their mainframe, is now selling snake oil? As the saying goes, MIS heads used to tell their co-workers "you will never get fired buying IBM" Of course IBM got lazy, and Compaq became the performance leader, then Dell came along matching performance but at cut rate prices. Boom, the rest was history.
The 8 track tape broke the vinyl chain, evolved into cassettes, then CD's, now DVD's. All had their advocates and their naysayers. Question is, what was the reasoning behind the position they took? Fear, vested interest, ignorance? Who knows, who cares?
Bottom line, in the corporate world a new technology is embraced quickly if it delivers cost effeciencies, period. No if, ands, or buts about it, if it works well and saves money there will be an ever growing market for any products or services that can deliver.
I was talking to a friend the other day that flys for a major international carrier. Whenever he goes abroad he has to call into the dispatcher back in the states to get his next flight assignments. He said that last week he made two calls, $158.00. Multiply that times the number of pilots, per day, per week, per month, per year. And that is just one company, citing one for instance regarding the dispatcher.
Enough said.
With international per minute charges regularly running more than $10 I think you will have a lot of interest, from litterally thousands of different customers that could reap huge savings.
As sure as I am about that, I am also convinced that FNET will succeed in building out a global IT phone network. People can believe whatever they want, just like the fellow in Barrons. I know what I believe and I've put a sizable investment on the line.
I have recently kept quiet, listening to "the fool" and his court jesters, while accumulating all I could afford.
You won't see me on here much anymore, all that there is to say has been said.
But I felt it necessary to come on and state my view one last time, while assuring everyone that I remain fully vested in FTEL and my convictions remain unchanged. I may be wrong, but if I am, I and I alone have made that decision, without being swayed by sentiment.
If there is one thing I have learned over the years, it is that following the herd only leads to the slaughter house. When others are selling, I'm buying and vice versa.
I'll close by saying that the following story says it all:
(PR NEWSWIRE) DJ: Buffett Warns on Level of Stock Prices: 'Margin of Safet
DJ: Buffett Warns on Level of Stock Prices: 'Margin of Safety has Vanished' in
Exclusive Interview with Adam Smith
NEW YORK, May 15 /PRNewswire/ -- This story was released yesterday by ADAM
SMITH'S MONEY GAME:
In a far reaching, exclusive interview on ADAM SMITH'S MONEY GAME, Warren
Buffett says that it takes a rosy scenario to bet on the stock market
continuing to rise at current rates and that he does not bet on rosy
scenarios. He also says that many acquisitions are fueled by the egos of
CEOs and self-interested investment bankers. The interview will be
broadcast on Saturday, May 16th on PBS at 9:30 a.m. on Channel 13/WNET in
New York, and various times nationwide.
Here are excerpts from the 25 minute interview with Adam Smith.
ADAM SMITH ASKS:
"Can you really have corporate profits continue to grow at this rate?"
WARREN BUFFET REPLIES:
"You can't have American business earning 20% on equity and real GDP
growing at 2 to 3 percent nominal, growing at 4 percent. If you retain
equity, because obviously if you earn 20% on equity and retain it all you
have to grow earnings 20% and the one thing I can promise you is that
corporate profits will not become more than 100% of GDP.
"So you either have to distribute a very high percentage of the earning
by either dividends or repurchases, or you get into mathematical
absurdity. The other possibility is that American businesses won't just
earn anything like these returns in the future. We have not seen it
before.
"I don't want to bet on it continuing. But I am saying that if it does
continue then stocks are not overvalued, but it takes a rosy scenario to
justify these prices. That may turn out to be true, but I have not made
money in the past betting on rosy scenarios.
"I don't think there is much of a margin of safety in stock prices now.
No, there is not a margin of safety. It leads to caution. But it doesn't
predict a bear market."
ADAM SMITH ASKS:
"We have more people in the stock market than ever before in history and
more than 90 percent of the money managers have never seen a bear market.
What should we think about that?"
WARREN BUFFET REPLIES:
"For people who think there is an easy way to make money year after year,
you are going to have some surprises, and there are large numbers of
people who accentuate the surprises. If you get a bear market rolling you
can shake up a significant percent of the people because they have not
been through it. Now, I don't think anyone knows for sure, but if you
look at human behavior and financial markets, people have exhibited fear
and greed for centuries and they will exhibit both in the future and fear
is a different thing to watch than greed."
ADAM SMITH ASKS:
"What about investment bankers?"
WARREN BUFFETT SAYS:
"When a corporate CEO says to an investment banker, 'Do I need an
acquisition?' I think that is a little like asking the barber do I need a
haircut. I think it is dangerous to get advice from people where their
compensation -- and maybe very large compensation -- depends on a specific
line of advice they give you. If they give you advice to buy a company
and they make $20 million; and they give you advice that is not such a
good idea and they get zero, I say that is not the most unbiased source of
advance."
ADAM SMITH ASKS:
"Why do smart people do dumb things?"
WARREN BUFFETT SAYS:
"That is the big question. They do it in investing. They do it in
managing businesses. Money does not go to the people with the highest
I.Q. There is a very poor correlation between I.Q. and investing and
results.
"It is ego, it is greed, it is envy, it is fear, it is mindless imitation
of other people -- there are a variety of factors that cause that
horsepower of the mind to get diminished dramatically before the output
turns out.
"I would say that if Charlie (Berkshire Vice Chairman Charlie Munger) and
I have any advantage it is not because we are so smart it is because we
are rationale and we very seldom let extraneous factors interfere with our
thoughts. We don't let other peoples' opinions interfere with it; we try
to get fearful when others are greedy; we try to get greedy when others
are fearful; we try to avoid any kind of imitation of other people's
behavior -- and those are the factors that cause smart people to get bad
results,"
ADAM SMITH ASKS:
"Can you think of an example of someone really smart doing something
really dumb?"
WARREN BUFFET REPLIES:
"I can think of lots of examples, both in business and investing. You see
it in the corporate arena where people make very dumb acquisitions; and
you saw the oil companies in the 70s all rushing after each other in their
various things and actually in the past great companies like Coke and
Gillette have gone into all kinds of different areas before they figured
they had a pretty good business in razor blades or soft drinks."
ADAM SMITH ASKS:
"There is a huge wave of mergers going on right now, do you think some of
that is the ego of the CEO?"
WARREN BUFFETT REPLIES:
"I think a lot of it is. There is a great desire -- you don't get to be a
CEO by being a milk-toast -- I mean you have a certain amount of zest for
action in most cases. That is how people get to the top. It is not fun
if you are a CEO to look around and see your competitors or colleagues
making deal after deal and being plastered all over the press and to sit
there and say I don't think these deals make much sense. That is very
difficult to do. And you have got other constituencies urging you on.
Your own people .. in an organization where other people are expanding
enormously by acquisition you find it very difficult to resist the
intrigue of the people below you who say why aren't we doing something.
"So not being a lemming when all the other lemmings are running in a
certain direction is a great advantage. You want to do your own running
off cliffs near the right place. And that can work in reverse. When
people are depressed, you know, that is a time often to be very
aggressive. You simply have to insulate yourself in some way from the
emotions that are running around you and that is easy to say but it is
hard for people to do."
ADAM SMITH ASKS:
"What makes you sell a stock?"
WARREN BUFFETT REPLIES:
"If I need money, we will pick whatever we like the least at the present
price. That is not necessarily a negative comment about the business.
Everything I have ever sold has gone up subsequently and they should
because they are good businesses, but I will pick the one I feel the least
sure of where it is going to be 10 years from now, not necessarily the one
that has the least potential."
ADAM SMITH ASKS:
"Does the use of derivatives give you any pause?"
WARREN BUFFETT REPLIES:
"It has the potential for trouble. I take the simplest derivative -- the
S&P index -- that is the margin account basically, and it is a lot of
margin in most cases for people who are buying. They don't put up 100% of
the money and we learned in the twenties that markets with participants
playing heavily on margins can be more dangerous than markets where people
are dealing in cash. And for that reason the federal reserve started
regulating margin requirements. The margin requirement for outright stock
ownership is far higher than what speculators could achieve through
futures and derivatives."
ADAM SMITH ASKS:
"Do you think derivatives ought to be regulated?"
WARREN BUFFETT REPLIES:
"It gets very tough to regulate them right now. I don't think there is
any easy answer on that. No, they are here to stay and I think regulation
would be almost impossible."
/CONTACT: Emma Clurman of The Dilenschneider Group for Adam Smith's Money
Game, 212-922-0900/
08:00 EDT
*** end of story ***
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