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aprovocateur,
I thank you for your detailed and informative reply. A few clarifications, buts, etc.
I'm not trying to score rhetorical points here but find an easy short-cut to potentially useful information. Frankly I could spend 2 to 3 weeks constantly reading up on telcos and would not know the sector as well as I pretend to know other sectors.
Diversification: Yeah, the last few times I went overweight, I got smoked.
However, that said, simple models show that as few as 6 orthogonal instruments allow for a great degree of diversification. If retail investors limit positions to 5%, then that means 20 positions or more to manage. Managing 20 or more separate financial instruments that are held as investments (as opposed to short-term technical trading positions) can be very time consuming.
Inflation. Yes, we have experienced some measured year-over-year deflation but I'm not calling for more deflation. I expect low, relatively stable positive inflation rates going forward. The excess liquidity will likely manifest itself in asset bubbles such as gold and other resources.
That said I like the way you use belief-grounded
contigent rules.
I notice that you didn't include Shaw Communications (SJR.B.to; SJR.n) in the basket. Any particular reason why?
What do my caribou shoulder blades say? The recovery will slow and protracted. Resource prices will decline though gold may stay in a speculative bubble for 18 months or longer. Bank earnings will suffer. Pipelines and telco earnings should hold steady or decline at a slower rate than other sectors. BCE's fortunes appear to be improving.
There was a good article on telecom companies in the mid-August FP. David Baskin is bullish on BCE, others not so bullish.
Fishing for telecom value
Jamie Sturgeon, Financial Post
Published: Saturday, August 15, 2009
URL: https://www.financialpost.com/related/links/story.html?id=1895418&p=1