Wall Street Hypocrisy
July 14, 2008
Now, there is no way in hell that I am as sophisticated as the bankers and analysts on Wall Street. But in my simple way of looking at things, I believe Wall Street needs to attend to their own knitting first.
Recent pronouncements out of various Wall Street firms have stressed concerns over the “macro environment” having a negative affect on telecom services. In doing so they have issued ‘holds” or “sell’ on certain public companies in telecom services. They should be issuing “sells” on themselves.
Let’s discuss the “macro environment” in terms of telecom service companies. Telecom services companies are not in the sub-prime mortgage business; we do not build houses, and we don’t manufacture automobiles. Wall Street — you helped graciously creating the telecom bubble earlier this decade … the current “macro environment” today and deflating bubbles you again created has nothing to do with telecoms.
Outside of our bubble you inflated years ago with your “advice”, historically and statistically telecoms are not affected by economic downturns. Today, this fact is more relevant than ever. Customers don’t stop talking in a recession - they talk more. They don’t stop accessing the Internet; they access it more due to the cost of gasoline. And, they will watch even more video for entertainment or communications.
Contrary to Wall Street experts, telecom stocks are a screaming buy right now. You can play the short term Wall Street FUD factor of “macro economic concerns” on asset light companies that rent from Ma Bell, or you can buy and hold for the long term those telecom companies anchored in their own local fiber optic infrastructure. The latter, of course, has greater staying power as the Internet and transport demand continues to grow by 100% and 50% annually respectively (eventually rendering copper facility based services obsolete).
More to come on the hypocrisy of Wall Street…
Written by Dave Rusin - Telecom Executive
Posted by admin | Filed Under Telecom USA, Telecom bubble, Trends + telecommunications, Trends in telecommunications
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