Almost buying Nortel.............

[short]

I'm on the verge of buying Nortel stocks, but at the price now I'm not so sure. For the past few weeks its been hovering around the 4.20's and below range. Should I buy now or wait till it hits below 4?? I'm not so sure, however I do think its at a reasonable price now. Although I'm worried that if I don't buy now it'll increase because the company already came clean with the financial results. What do you think??

[short]

What are some good recommendations for commodities that are suitable to day trade every now and then??

[stang]

A lot of analysts when comparing it's P/E to market competitors believe it should only be around $1.60 to $2.00. Also, this past bit of news doesn't mean too much. What will is the 2004 reported results (which we may see by 2006!!!!).

[earl]

It will take decades before Nortel stock shows any significant appreciation.

I have friends that bought at $60 in hopes it would return to $100. They then bought at $25 in hopes it would return to $60. I only know one person who made money on Nortel and she bought it at 75 cents.

Just my 2 cents.

[langeweile]

If you have extra money, that you don't need right now, and you like to gamble..go ahead.

It is pure specualtion at this point. There is a 50/50 either way IMHO

[danmand]

Consider how many shares there are outstanding, I believe it is around 3-4billion. To support a share price of $4 with a P/E of 20, the company will need to earn $800 million.

[langeweile]

Originally posted by danmand
Consider how many shares there are outstanding, I believe it is around 3-4billion. To support a share price of $4 with a P/E of 20, the company will need to earn $800 million.

I was not speculating on a long term investment. The stock has been dropping on bad news for quiet a while now.
At best you specualte that if the news turns a little more positive, that there might be a few $$ bounce upward. On which you could make a few quick bucks. Like i said it is pure speculation.

A P/E of 20 is not bad for the high tech sector.

[billybobjoesue]

7 analysts say hold
3 say buy
4 said sell...

I'd buy

[short]

Originally posted by JPsoHot
Alot of good tips from all in this thread.
I would wait till it drops, wich it will and get it at 2 or 2.50.
I am sure there's gonna be some news in the new year that will make this thing pop to 5 or 6bucks maybe even 10 bucks FOR NO REASON other than people inflating it by chasing it.
Thats when you dump a bunch and pocket the money.
All in all Nortel is in a rut along with many of the same companies that produce the same product and services.
I also agree with many that it may never be back up over 40 or 50 bucks again.
Good luck!
If you want something long term try some Cognos stock. Its a super company that out performs every quarter.

How sure are u that it'll drop to around $2.50 or so?? It was only a few months ago that it was in the $3 range..........and now that they're starting to come clean about their actual numbers, the price would increase even if they're operating at a loss. The fact of the matter is that stakeholders only care (for now) that they are truthful, down the road if they continue making less-satisfactory $$$'s, then the price will drop.......so I guess its good to buy now?? or wait later in hopes Nortel will not perform well??

[danmand]

Originally posted by billybobjoesue
7 analysts say hold
3 say buy
4 said sell...

I'd buy

The translation of broker recommendations are:

Strong buy : Buy
Buy : Hold
Hold : Sell
Sell : Dump at any cost

[short]

one question, if i buy and say 4.20 and sell at 5.00, resulting in a 0.80 profit per dollar, how can i calculate how much will be taxed?

[danmand]

(5.00-4.20)*numberofshares - commissions.

Be aware that only 50% of capital gains are taxed.

[short]

Be aware that only 50% of capital gains are taxed. [/B][/QUOTE]


So if I have 1000 shares and comissions is $60 (30 to buy and 30 to sell)....that leaves me with $740 net...........at half: $370 will be taxed....whad does this mean?

*** I missed out on taking the taxes course back in school, which I should've because it wasn't a required course for the program.

[danmand]

Capital gains are taxed at half the rate of salary, interest etc.

[langeweile]

Originally posted by short
Be aware that only 50% of capital gains are taxed.


So if I have 1000 shares and comissions is $60 (30 to buy and 30 to sell)....that leaves me with $740 net...........at half: $370 will be taxed....whad does this mean?

*** I missed out on taking the taxes course back in school, which I should've because it wasn't a required course for the program. [/B][/QUOTE]

$30!!!! for commission...yikes. i pay $9.99 US per trade

[danmand]

Originally posted by langeweile
$30!!!! for commission...yikes. i pay $9.99 US per trade

Yet another example of US superiority!

[n_v]

Originally posted by earl
It will take decades before Nortel stock shows any significant appreciation.

I have friends that bought at $60 in hopes it would return to $100. They then bought at $25 in hopes it would return to $60. I only know one person who made money on Nortel and she bought it at 75 cents.
Doesn't prove much other then people you know aren't too smart when it comes to the market.

[ice_dog]

It is not what price you pay that determines if you are gonna make a profit. If you buy it on an up trend, you will make money. If you buy it on a down trend(beginners' mistakes), you will loose for sure.

So, identify the trend, use 50-day moving average, 200 moving day average.

The best way to decide the entry point is to follow the stock daily. Wait until it forms a base. When it breaks out on higher than average volumne, jump in. Get out when the volumn begin to think and the price goes sideways.


I bought Nortel @ 2.00, 4.00 and 7.00. Sold them all at 9.5.

One mroe thing, when the company is receovering, it makes a small profit. The PE ratio tends to be high. I don't pay a damn about P/E ratio. I have playing this game long enough to know that it means nothing. It all depends how much the market is willing to pay.

[Sargon]

So if I have 1000 shares and comissions is $60 (30 to buy and 30 to sell)....that leaves me with $740 net...........at half: $370 will be taxed....whad does this mean?


short:

It means you'll pay tax on $370 at your personal taxation rate. That is:

if you are in 25% tax bracket, tax on $740 net capital gains will be $92.50;

if you are in 33% tax bracket, your tax on $740 net capital gains will be $123.33;

if you are in 50% tax bracket, your tax on $740 net capital gains will be $185.00;

.......... and so on......

[alligator]

I recently bought Nortel call options Jan 07 4.00 call. Bought 100 contracts or option to purchase 10000 shares at $4. Paid $1.70.

It is speculative but the options have two years to run and I will be in the money if Nortel goes up even a little bit.

Just a suggestion.

[Sargon]

If you are in 25% tax bracket, where most working class are, $92.5 tax on $740 capital gains works out to 12.5% of the capital gains. For the extra 2.5% tax you don't have to hold the security for a year plus you get better social benefits.

[Malibook]

Originally posted by DonQuixote
In the US capital gains are 10% if held for over 1 year.
Brutal tax on gains up North. And you wonder why
there's a brain drain in favor of the US.
Hey, it is much better now.
It used to be 75% of the gain was taxable just a few years ago.

[Malibook]

Originally posted by Tom_002
Is there any distinction in Canada between long term capital gains and short term capital gains?

In the US the holding period has to be one year in order to qualify for special tax treatment.

One more question, Can a taxpayer offset ordinary income, ie from wages, interest, etc. with a net capital loss? What are the rules please??

Tom
I don't think there is a long and short term distinction here in Canada.
I believe it is a straight across the board 50%.
I think dividends are taxed at a more favorable rate.

I know in the US, when someone exercises an option, they get a reduced tax rate if they hold it for some period of time.
However, they have a set tax obligation even if the price crashes.
Many people got greedy and burned by this.

Capital losses can only offset capital gains, not employment or interest income.
Capital losses can be carried forward indefinately, and they can offset gains going back up to 3 years.

[Foxhound]

Nortel is a short. It's still grossly overpriced.

[short]

now, when i purchase the shares in two weeks and make the occassional buy/sell transactions, do i have to report the gains/losses from each of those transactions in this year's income tax filing?? do i have to keep track?? anyway, i'm set on buying nortel pretty soon, friday's close is 4.07 and i suspect somewhere in the late $3 in the coming week.

[clipper]

Nortel is the crack-cocaine of the investing world.

People that have lost a ton of money cant resist sticking their heads back into into it in hopes of "getting even".

I'd wait until all the principals involved are wearing prison pinstripes before getting back into this turkey.

Nobody has ever known what the underlying value of this stock is. Can anyone believe these guys?

Of broader concern is the fact that the market is already almost fully valued. The only real action in the past year has been oils, metals, gold and income trusts. Uranium and coal have some room to move upwards, but that's about it. The techs have had their run. Biotechs - maybe. If you like to investment "surf" the only place to be is the Nasdaq. You pretty well have to be a day-trader in that market. No-one, repeat no-one, should be in the commodities markets unless they have expert-level knowledge - far too dangerous.

The US economy is casting a darker and darker shadow over the markets.

If you have to be in the market, be somewhere safe this year.
Ideally something that pays a dividend, or a dividend income fund like PH&N. The direction of the market is very unclear, and a sharp drop is more likely than a sudden upsurge.

It's easy to make money in an "up" market and easier still to lose it in a "down" market. In a down market, stocks like Nortel can dump 50% of their value in a matter of days.

[short]

Originally posted by Happy
short, based on your questions, sounds like you are still green in investing (no offense), unless you already have a portfolio of solid companies, I wouldn't recommend you gambling on Nortel. There are just so many better stocks to buy. Sure, if Nortel shot up, it'd be phenomenal, but there's always the downside. To win in investing in the long run is not about chasing stocks that could triple or go to zero. It's about finding a basket of rock solid companies that are leaders in their industries with proven earnings and prospects for growth.

I made tons of money in Nortel LAST YEAR but I won't touch it with a ten foot pole now, it's too murky.

If you feel compelled to buy some stocks, buy Manulife Financial or Sunlife. Put them away for a year, ignoring the daily fluctuations, you should be rewarded a return north of 10%.


yes, i'm green in investing........i'm just a student exploring an option(s) to make quick nominal returns here and there and i thought nortel can enable me to do that since it swings up and down. as for manulife or sunlife, i can't afford those.

[short]

i found a site that caters to info strictly for penny stocks.......any recommendations??

http://www.allpennystocks.com/apsc/can/hot_cdnx/index.htm

[Malibook]

Originally posted by short
i found a site that caters to info strictly for penny stocks.......any recommendations??

http://www.allpennystocks.com/apsc/can/hot_cdnx/index.htm
I would recommend that you only risk money that you can comfortably afford to lose and always use a stop loss to avoid disasters and in some cases to lock in some gains.

[friendz4evr]

You buy Nortel because it is the stock to own - not that that it makes sense to buy it. It is THE ONE you talk about.

[james t kirk]

I don't think Nortel is going to drop to 2.50 any time soon, sorry to disappoint.

They have sorted out their books right up until 2004. 2004 results are due this month and they will file, you can bet on that. They still made a profit in 2003, just not as much as they said they did. I can't help but wonder if they had of released "the real results" I bet that this stock would be sitting around 6 or 7 bucks right now based on the numbers they just released at the start of the week. Because of the scandle, the selling has been overdone.

The question on a lot of people's minds right now is, "How's business now?"

The entire scandle has been a drain on the company. They need to get back to work selling telecom equipment. But part of me thinks that this is kind of like Ben Johnson. Everybody does it, only Ben got nailed. In the market I think it's the same, everybody does it, Nortel got nailed.

On the plus side, they have cleaned house, they have reissued all results other than 2004, most of the board is not seeking re-election, and they are trying to get those bonuses paid back. You can bet that the results that you see from here on in will be valid.

On the down side, the market is falling, the telecom sector is still not out of the woods, and a great deal of trust has been destroyed. Further there are huge class action lawsuits (not that they ever go anywhere anyway) pending criminal investigations (Dunn, Roth and the rest, look out.)

Jim Crammer said of Nortel that he loves accounting scandles because it causes a huge drop in the stock and allows you to pick up a good deal on a solid company.

Unless Nortel is going to go broke (I don't think that it is), then long term, people will be looking back at this and kicking themselves for not buying.

The question is, is Nortel going to go broke? Would the Canadian gov't let that happen?

A couple of other dark clouds on the horizon would be the threat of delisting from the NYSE (though with the filing, that appears unlikely) and or a reverse split, which would not be good for your holdings in Nortel.

If you don't think that NT is going to go broke, then this is a buying opportunity in the long run. If NT doesn't go broke, don't think that the highest price on this stock in the next five years is going to be 4 bucks.

[Foxhound]

James Kirk!


I can't help but wonder if they had of released "the real results" I bet that this stock would be sitting around 6 or 7 bucks right now based on the numbers they just released at the start of the week.

You're willing to put a far higher P/E multiple on the stock than I would. I see that Nortel reported E.P.S. of U.S.$0.06 per share before extraordinary items for 2003 - with 2004 remaining a mystery. I like to give a "good" growing company a 20 multiple. That implies a stock price of U.S.$1.20 or Cdn.$1.45. Of course there are others who would ask me why i would pay anything over book i.e. net equity per share for a company as shaky as Nortel, book being U.S.$0.91 per share.


Jim Crammer said of Nortel that he loves accounting scandles because it causes a huge drop in the stock and allows you to pick up a good deal on a solid company.

Yes, but in this case solid is the key word. I don't think Nortel can be said to be solid.


The question is, is Nortel going to go broke? Would the Canadian gov't let that happen?

Perhaps not but keep in mind that bailing out a company is not the same thing as bailing out the shareholders. If Nortel were to require a government bailout to survive, its shareholders would be wiped out. See Air Canada.

[short]

Anyone know about this company being advertised on stocks websites as......."A small start-up U.S. company earning billions $$ combating cancer and terrorism. Find out about this company and get the stocks while its on the ground level." Unfortunately, one has to pay a fee in order to get this "privileged" info. IMO, such a company will be hot in the years to come. Think back when bullet-proof vests were given the wrinkled eyebrow because no one dared to test the product and thus were unable to see if it actually works......until the creator did it himself and it bacame a big hit.