Post of the Day
January 14, 2000
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Long Term Thoughts
At the beginning of this year (Jan 3rd) I bought some Sonera. Then over the next few days I watched it lose 20% of its value. I felt sick. What poor timing! Rather than expending energy lambasting myself I went through a process of thinking that may be helpful to others here so I'm writing these thoughts down.
First, I refreshed myself with the Forbes article and the great posts from Mycroft, Tero, et al and read through a thread on Grape's Fisher King board. I have to say that my financial and accounting skills are not as developed as I wish they were. Reading some of the posts reminded me of when I was a kid and sat on the stair landing listening to my parents and their friends discuss politics. Though not thoroughly understanding the discussion I still followed the ideas. I familiarized myself again with the services and software Sonera is developing (SMS, PKI) which reminded myself what cool stuff all this is. And I looked at the possible negatives such as their economic ties with Nokia and decided in my own mind this wasn't so negative.
It is important to me to have an understanding of why I am buying this stock. This understanding is what, I think, keeps me long term. To rely on the opinion of someone else like Mycroft or Tero can be dangerous. (Mycroft, your posts got me interested in this company and I love your thinking and enthusiasm.) But it is important to have reasons I can call my own even though they may not hold up to the scrutiny of number crunchers or be shared by others.
Anyway, here are some of the reasons why I like this company and bought its shares. And even though it may not be as important as reading what experts write it is important to me that they are my opinions and experiences and not those of someone down the street.
* I firmly believe based on observation and feeling that the wireless business is not only growing but will grow quite rapidly.
* I believe that Sonera is at the cutting edge of this industry in terms of wireless software development and in the application of this software. In my own business I know that being on the cutting edge means a lot. It doesn't mean that others won't be making money but it gives Sonera the advantage to make a lot more money.
* My own experience with clients in Turkey and Russia adds respect to what Sonera is doing in these countries. There the phone lines are atrocious. I always try to reach my clients on their cell phones�not their office phones.
* The idea of M-commerce is exciting. Wouldn't this experience be similar to my experience on AOL where I purchase something and have it billed directly to my credit card which they have on record? It certainly is convenient! IMHO, I think this will catch on.
|"Watching the market on a daily basis is worse than watching water boil or grass grow."|
* The experience I had at a trade show I attended in Europe a year ago made an impression. The hot item was a hands-free cell phone and to see hundreds/thousands of people walking around, seemingly talking to themselves was surreal. As the functions on wireless increases the more important it will become to people. And wireless functions are what Sonera is involved in.
* I like a management team that is smart (the Turkcel investment is an example � a 100+M dollar investment now worth 7+B dollars).
* I've always liked the expression "thinking outside the box". This company seems to be doing that. At least, they are thinking outside the country.
* I don't know if the VoiceStream investment is a good one. Or should one invest in GSM in the US? I don't know. But I do know it is an aggressive move and other decisions they have made such as Turkcel is nothing but brilliant. I like aggressive management.
* Russia has huge potential. Finland is right next door and this will help a lot. Having completed a job in Russia 3 years ago I came to the conclusion that one doesn't want to do business there unless you can be nearby. (I don't know the particulars of Qualcomm's problems in Russia but at the time, 3 years ago, I wondered how they were working there with their headquarters in San Diego. As it turned out Qualcomm pulled out of Russia.) My gut feeling is that Sonera will have problems there also but will be able to solve them.
* This next statement is a broad personal generalization. I've never done business in Finland but I've worked with clients in Sweden, Norway, and Holland and I must say I like the business style in Scandinavia. All the people I dealt with were bright, friendly, honest, and shrewd. They kept me on my toes and I enjoyed the experience. I can only imagine that the management team at Sonera reflects these same qualities.
* I was in Taiwan about 6 months ago. My client was meeting with a number of suppliers. My meeting overlapped with a meeting with Nokia representatives who were selling their IRD (TV set-top box). In chatting with them I mentioned the new Palm VII and how cool it would be to get emails by wireless. They looked at me funny, then said they have been doing this for quite a while in Finland. They then pulled out their phone and flipped it open to show the screen and keypad. Blew me away. And I realized then this is where things are going.
Finally, here are some thoughts that worked as good antidotes to the mental flogging I was giving myself for buying a stock that then dropped in price:
* I reminded myself that I'm not buying short term but long term.
* I reminded myself of how I condemned myself 4 years ago for buying a stock at a seemingly high price. Since then the stock has increased 2000+%.
* I reminded myself of the risk I took when I bought a stock 2.5 years ago at a good value, watch it increase 20%, and then sell. I thank my stars that it dropped again and I picked it up before it increased 2000+%.
* I reminded myself of the many stocks that I waited for their price to drop before buying and they never did and they have since increased to�(the number is too painful for me to calculate.)
* Finally, the best antidote is when the price drops (and you still feel good about the company) you buy more! I did this yesterday!
I feel better now than I did on Jan 6th. Now that I'm well invested I need to forget about this company. Watching the market on a daily basis is worse than watching water boil or grass grow.
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