T3 Telstra Deja Vu

Faustina 'Fuzzy' Agoiley seeing Deja Vu in the T3 Telstra (TLS) Float

Posted in Traders' Delusions, Submitted by Trading Critic on Mon, 2006-10-09 07:43.
Faustina  'Fuzzy' Agoiley seeing Deja Vu in the T3 Telstra (TLS) Float

Here's the main reason why I don't read tabloid newspapers: they give useless mish mash information that does no one any good. One case in point was a short piece about the upcoming Telstra (T3) (TLS) float in the one-page "Business" section of the The Saturday Daily Telegraph. It took a quote from the Channel Ten "Video Hits First" show host: Faustina "Fuzzy" Agoiley (The woman that reminds me of a golliwog because of her hair). The "news" piece reported that she had been one of the 1.6 million shareholders that had bought into T2 at $7.40 a share. Asked about whether she would invest more of her money into Telstra in the T3 float she sensed a case of déjà vu stating that: "I wouldn't invest into [T3] because I'm still burnt from T2 and I'm still looking for a long term gain from that so I wouldn't see why people would want to invest more money into those sorts of shares."

Now what good is that reporting that crap in the newspaper? As a trader it makes no sense at all. As an investor the reasoning in that statement isn't logical. Okay, she has the right to claim she has been burnt from the Telstra (TLS) share price halving in value and hence wouldn't invest in T3. If she stopped there, I would be empathic to her case. I have a problem with the two last points: the long term gain and the point about not investing in "those sorts of shares."

If I was really an investor and I was really in for the long term I would see the upcoming float as an opportunity to buy into more Telstra (TLS) shares. I would see it as a discount. As an investor, if you had no belief in the shares, you would have let go of those shares a long time ago. As a trader, if you were to buy into this cheaper price with a bullish view and you are still holding your T2 shares then you are effectively lowering your break even price.

Finally, what does she mean by "those sorts of shares"? Shares that you put money into and which halve in price? I didn't know there was such a classification. If there was a class of shares that regularly double in price let me know. (Actually there is a class of shares on the Australian Stock Exchange (ASX) that regularly doubles or halves in price – will post more about them in future). When you invest in shares there are inherent risks. Any investment holds risk. There are no guarantees. Even the long term chart showing the markets from early 1900's slowly worming up is no sure bullet proof reason that the markets will continue to go up. "Those sorts of shares"? If you don't know the risks of any investment don't put your money on it.

Submitted by Cameron (not verified) on Tue, 2006-11-14 06:00.

As the saying goes re: tabloids, "it's only entertainment". T3 has stimulated lots of lunch room discussion too.

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