FTR Bagholders: Take a Lesson From RIM
By Rocco Pendola - 05/08/12 - 1:43 PM EDTTheStreet) -- Last week on TheStreet, I made nothing short of an impassioned plea to telecommunications provider Frontier Communications
I feel for what I am sure are a whole host of retirees who got taken by what was once a double-digit dividend return. Of course, no dividend can make up for a 51% drop in the price of the underlying stock in the last year.
Way to be backwards looking ... I just took the plunge yesterday at just over $4.00 per share, thank you very much. Why? Because my focus is on the future, not the past. The steep price decline provided a much better valuation (entry point) than was available 12 months ago.Man. It's enough to make this Bozo cry. Go ahead. Buy more. Soon, you should be able to get some cheap shares under $3.00 per share. Please allow me to make a couple of things completely clear. First, I hate to see people lose money. Nothing sucks more. Therefore, I am not gloating or laughing in a bagholder's face. Even a bagholder who called me a "Bozo." Instead, I am trying to make the point that you are fooling yourself If you continue to buy this stock. Second, if you know that I am long Pandora
Listening to Bozo's like this is why most little investors lose regularly.
I really think the acceleration, as we talked about, will be in Q3 and Q4. Q2, we will continue to finish the cleanup from this first quarter conversion. And we do see stability continuing in the second quarter. So we don't foresee any fallbacks on revenue. But when we look at the acceleration, we're really focused on really being aggressive in the marketplace in the third and fourth quarter of this year.Wait. Rewind the tape. Is that FTR Chairman and CEO Maggie Wilderotter or former RIM co-CEO James Balsillie? It's difficult to tell. As Balsillie's company was falling off of a cliff, he was offering similar reassurances. Consider what I wrote on Seeking Alpha in May 2011:
RIMM's FY2012 guidance is the stuff shareholder anger is made of. I see no way in the world, after lowering Q1 guidance and the poor timing of inferior product launches, RIMM can meet its own projection of beating consensus EPS estimates for the year by nearly $1.00.And then, lo and behold, in June of 2011, RIM slashed EPS estimates for FY2012 by about $2.00. Through all of this, RIMM bulls remained steadfast. They refused to read the indelible ink on the wall. Many continued not only to defend, but to buy the stock on the way to 52-week low after 52-week low. You might have full confidence in Frontier management. I can appreciate that. But do not allow this conviction to interfere with your position in the stock. Learn something from the mistakes of those who came before you. In last week's article on FTR, I show how the dividend yield does, for all intents and purposes, nothing to offset the massive losses produced by the stock. If you're holding the bag on this dog, think about two crucial points with relation to the association between your conviction and stock ownership:
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