TELECOM Digest OnLine - Sorted: Re: Long-Term AT&T Investors

Re: Long-Term AT&T Investors

Ernie Klein (ecklein@pacbell.net)
Mon, 06 Mar 2006 00:30:22 GMT

In article <telecom25.88.12@telecom-digest.org>, wollman@csail.mit.edu
(Garrett Wollman) wrote:

> [Welcome back, PAT!]

> We've all heard that AT&T was once (perhaps still is) the most
> widely-held stock in the United States. Most of us probably know
> someone who bought AT&T stock long before the breakup and then never
> touched it.

I am one of them.

> Every so often you'd hear reports about how good an
> investment this turned out to be. I was curious to see if I could
> replicate this myself, following the history of Mother and her babies
> from 1970 to the present day.

> My results suggest a somewhat different picture. Adjusting for
> inflation, that investment would today be worth today about what you
> paid for it in 1970. I suspect this is because most such analyses
> assume reinvestment of dividends, whereas I assume the contrary. (I
> had to make this assumption in order to finish this project in a
> single evening.)

But the reinvestment of dividends is what made the investment so good.

> You can find my analysis at <http://khavrinen.csail.mit.edu/t.html>.

I purchased 100 shares of AT&T in 1962. Other than cashing a few very
small checks sent to me because of mergers or spinoffs for partial
shares, I have not touched the account. Until 2001 all dividends were
automatically reinvested, after 2001 dividends have been sent to me in
cash otherwise the total value would be higher.

As of Friday, 3/3/2006 the value of the shares (of the remaining
companies, ACR, T, BLS, CMCSA, LU. Q, VZ & VOD) was $118,188.12.

Actual figures, no analysis involved -- all from 100 shares of AT&T.

-Ernie-

"There are only two kinds of computer users -- those who have
suffered a catastrophic hard drive failure, and those who will."

Have you done your backup today?

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