My predictions of falling share prices in 2000 and 2001 as well as
last year were right - and I see the fall of shares continuing in
most cases.
My buy recommendation for Intertrust at US-$ 4.00 was right - even
though the company is not listet anymore. A group of investors
including Sony and Phillips bought the company for about US-$ 4.30
last fall. I think this was a bad deal for the shareholders, but it
was unavoidable, since the company would not have gotten enough money
to really establish themselves as moneymakers. Most of my other buy
recommendation were wrong though - but at least I warned my readers
against most other shares which have fallen way more then my
recommendations.
Currently, I do not really suggest buying many shares, but at least
EMI seems to be OK. The company has gotten rid of a lot of unnecessary infrastructure like physical distribution companies in several countries and owns a lot of valid copyrights. Prices below UK-L 11 are definetely OK in my opinion with some serious potential for grwoth once the music market recovers.
Vivendi-Universal is rather cheap below its breakup value of potentially 36 Euros (and therefore at the current price of 16) , but I dislike the idea of the ompany selling its entertainment assets. This would actually leave the rest of the company with less debt (actually, probably with rather too low a leverage) and with some mobile phone operations, but without valid content assets. This is completely contrary to the original good idea behind the conglomerate and the chances for mobile phone operators without access to content are rather low in my opinion.
I would definetely stay away from or actively sell: Deutsche
Telekom, AOL-Time-Warner, all german bank shares, car manufacturers,
retail companies and phone manufacturers.
The earnings expectations for most of these ar still way too
optimistic and based on the assumption that we are just in a slow
phase before the overall economy will take of again with a fast
growth. This is completely wrong especially for Europe in my opinion.
Asia and potentially the real third world regions might have some
growth again soon - but Europe and especially Germany have bigger
structural and psychological trouble than anyone wants to admit.
There is deflation, which is partially offset by price-rises of the welfare states .. their taxes and service charges, but the current consumer expectations are much more negative then any official study will show. The "people in the street" are actually reacting much more dangerously then normal media or any politician will accept.
Last Updated: 16.June 2003