SuperModels Community Join the discussion in the MSN Money SuperModels Community.
SuperModels Recent articles: • 15 dividend stocks for a big-cap comeback, 12/15/2004 • iPod vs. satellite radio: serious trouble for Sirius, 12/8/2004 • $10 and $20 stocks that can make you 20%, 12/1/2004 More... | SuperModels Hey, Modelman! Tune in to Sirius Readers debate whether Sirius is the future or, as Jon Markman wrote recently, a cool, sexy stock with a lot of serious questions. Plus: Good stocks selling at $10 or $20 or that pay fat dividends. By Jon D. Markman Every couple of months, readers implore the author of SuperModels to answer their questions with the cry, "Hey, Modelman!" Hey, Modelman: What are you doing? All my friends think you have lost your mind. (iPod vs. satellite radio: serious trouble for Sirius.) How do you compare the iPod, a glorified Walkman, to satellite radio, which is the future and will not fail? I always speak highly of your reports but got slapped by this one. I am one of thousands who think the same way. Hey, Modelman: Sirius Satellite Radio
Hey, Modelman: Get a life. Youre just upset you could not catch the boat in time to buy. People like you should just quit. You really stink as a writer. I will never read any of your stories again. Get real, guy, Sirius is the future. Modelman: Most of the several hundred e-mails that I received on this subject insisted that I just dont get satellite radio, that it shouldnt be compared unfavorably to the iPod, that its prospects as a medium are without limit and that Im an idiot for critiquing their pet rock. The fact is that shareholders of this stock are so blinded by fanaticism that they dont seem to be able to read. Maybe thats why they listen to the radio. First of all, I explained and recommended satellite radio back when Sirius was selling for $1, and most of the letter-writers were still smarting from their bear-market losses. In May 2003, I wrote, If you missed your chance to invest in cable television in the 1980s and then missed your chance to invest in personal computers in the early 1990s and then missed your chance to invest in the Internet in the mid-1990s, then the market gods are giving you one more opportunity to get ahead of the crowd: You can invest in satellite radio right now, right here in the early 00s. I signed up for Sirius service back then and loved it. Still do. I get it, I get it, OK? But the purchase of a stock is not a vote in favor of a product. It represents a share of the future earnings stream of a company. Over the long history of the U.S. stock market, there has been a range of valuations for hot new technologies and media. And while Sirius shares sat at the extreme low end of that range two years ago when most were skeptical of its potential, its now way above the top of the range as millions have piled on board. At the current price, the market thinks that Sirius will be eight times more successful than eBay They may be right; who knows? Good investing is about anticipation, not reaction. Maybe satellite radio will cure cancer, turn water into wine and bring peace to the Middle East. At the moment, however, it only promises to solve the boredom of a long commute and save the world from light-beer commercials -- and that might not be good enough. Related news and commentary on MSN Money Indeed, the bottom line is that above $4, the stock represents a bet that a single radio personality, Howard Stern, will be able to deliver 10 million subscribers over the next couple of years. That makes Sirius a sort of a Martha Stewart Living Omnimedia One more thing: My column did not say that Apple Computer Personally, I prefer a third path for music -- a blend of the two. I subscribe to -- and constantly use -- Rhapsody.com and Napster, which are online services of RealNetworks At the end of the day, we all want both convenience and choice in our music. Thats common ground. In our stocks, however, outside of the fun and profit of pure speculation on a momentum run, we should also want a foundation of value. And until Sirius can come up with a factory-installation deal with Ford Maybe when its at $30, youll all be laughing at me. So be it. Wouldnt be the first time I blew a big opportunity or the last. In the meantime, wouldnt it be a hoot if the company that Stern is leaving -- the multimedia powerhouse Viacom Stock scores and bargains Hey, Modelman: How quickly are StockScouter scores updated? It has graded Symantec Modelman: StockScouter scores are updated every weeknight. The three market preferences -- market capitalization, sector and style -- are updated weekly on Tuesdays. The technical factor can be rated highly, i.e. an A or B, if a stock is either in a steady uptrend or if it has fallen so much that it is close to support. That is why, unlike most rating systems, a stock does not need to be near its highs to be ranked highly. Hey, Modelman: In recent columns ("$10 and $20 stocks that can make you 20%"), you have asked for reader suggestions for stocks that trade at $10 or $20, or pay good dividends. How about one that does both -- the new, post-bankruptcy telecom MCI Worldcom, now just called MCI Modelman: The valuation and business prospects of MCI, now trading at $20.14, are very interesting, especially since the majority opinion of the companys prospects is still so highly negative. Its largest independent shareholder is the vulture-investing Mexican billionaire Carlos Slim Helu, and its institutional holders are a whos who of special-situation hedge funds, turnaround funds and value funds, including the one run by Kmart Here is a list of other $10 and $20 stocks that were nominated by readers: Acambis Northwest Pipe Cepheid Candela Ill track all of these over the next year and report back. Fine print To learn more about Rhapsody.com, click here. . . . To learn more about the Candela lasers, click here. . . . To learn more about Cepheids biothreat product, click here. . . . To learn more about Northwest Pipe, click here. . . . To learn more about Acambis vaccines, click here. Jon D. Markman is publisher of StockTactics Advisor, an independent weekly investment newsletter, as well as senior strategist and portfolio manager at Pinnacle Investment Advisors. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at jon.markman@gmail.com; put COMMENT in the subject line. At the time of publication, he held no positions in the stocks mentioned. | ||||||||||||||||||
|
|||||||||||||||||||
