Subject: [NEXTEL-1] Nextel lost at least 80% of it's value snice its peak-

From: Marcel <[email-masked]>
Date: Sun, 16 Mar 2003 06:25:25 -0500

<Snip>
Meanwhile, Cisco, Yahoo, EMC, El Paso, AMR, Delta, Motorola, Texas Instruments, Nextel and
AOL have
lost at least 80 percent.
----------------------------------------------------------------------------------------------------------------------

March 10, 2003

3 Years After Nasdaq Peak, Investors Crave Safety

By FLOYD NORRIS

xactly three years ago today, all seemed bright to investors. Now there is little to cheer
about, as investors who once were
able to see only the positive now seem transfixed by what could go wrong.

It was on March 10, 2000, that the Nasdaq composite index hit a peak of 5,048.62. It had
doubled since the previous summer,
and those who had warned of a bubble in technology stocks had been so wrong for so long
that few listened to them any longer.

But they were about to be proved right. Within little more than a month, the Nasdaq had
lost a third of its value, and while it
temporarily rebounded after that, it has never come close to its old highs.

Then, in March 2001, a recession began. Six months after that, two planes hit the World
Trade Center, and another slammed
into the Pentagon. The recession probably ended in late 2001, but the after-effects of the
bubble continue to plague the
economy. The telecommunications industry — whose bubble was far larger than the
Internet's, at least as measured by dollars
invested and lost — remains depressed, and the term "jobless recovery" is popular.

No wonder it is the one-time bears who are now most likely to get a respectful hearing
from investors. Jack B. Grubman and
Frank P. Quattrone, who three years ago could dole out millions in initial public offering
profits, are now more likely to be
spending time with their lawyers than with speculators seeking their wisdom and favors.
The I.P.O. market is all but dead.

"The striking difference between now and then is that the supreme confidence that things
would work out has been replaced by a
ghoulish fascination with what could go wrong," said Robert J. Barbera, the chief
economist of ITG/Hoenig. A bear then, Mr.
Barbera now thinks prices are depressed by concerns about Iraq, and expects a rally if a
war goes well from the American
perspective.

Warren E. Buffett repeatedly issued bearish pronouncements when stocks were nearing their
peak, and he refused to buy
technology stocks for the portfolio at Berkshire Hathaway, the company he runs. As a
result, investors gradually concluded that
he had lost his touch. From mid-1998 through the peak three years ago, the price of
Berkshire Hathaway shares fell 47 percent,
while the Nasdaq composite was rising 166 percent. Since then, Berkshire is up 56 percent,
while the Nasdaq composite index
is down 74 percent.

Mr. Buffett remains unimpressed by valuations. In his annual letter to shareholders,
released last week, he said he could find very
few stocks that seemed worth buying. "That dismal fact is testimony to the insanity of
valuations reached during the Great
Bubble," he wrote. "Unfortunately, the hangover may prove to be proportional to the
binge."

Mr. Buffett's core holdings of eight stocks — the largest being Coca-Cola and American
Express — declined 2 percent last
year, far better than the 23 percent decline registered by the Standard & Poor's 500.
Those holdings ended the year valued at
$23 billion.

Despite his bearishness, the annual report issued over the weekend showed that Berkshire
had put $350 million into the stock
market during the year, selling $1.4 billion worth of stocks and buying $1.75 billion. But
that amount paled against the $10 billion
Berkshire put into the bond market. The report did not disclose which securities Berkshire
bought or sold.

At the market's peak, Mr. Hoenig noted, Alan Greenspan, the Federal Reserve chairman, was
comparing Internet stocks to
lottery tickets. To an economist, lotteries and casinos are interesting because people pay
to take risks even though they know
that the odds are against them.

It turns out that Mr. Greenspan had something of a point. Most of the initial offerings
near the peak turned into disasters, with the
ones that doubled and tripled the first day of trading being among the worst. An exception
is the Hotel Reservations Network,
since renamed Hotels.com. It rose 62 percent on its first day of trading a couple of weeks
before the peak and has more than
doubled since March 2000. Unlike most of its peers in the late-bubble class of new
offerings, that company is reporting growing
profits.

For most investors, safety has become a watchword. Perhaps the safest investment one can
think of is a Treasury bond with
inflation protection, and investors have flocked to them. Over all, Lehman Brothers
calculates, investors in inflation-protected
Treasuries have seen gains of 46 percent over the last three years.

Conventional Treasuries have also done well, as the yield on 10-year Treasuries, at 6.39
percent when the stock market
peaked, has fallen to 3.62 percent, producing substantial profits for investors.

Stocks that pay dividends have done better than those that do not, and there is a small
trend toward paying dividends, with
Microsoft issuing its first payment last week. Three years ago Microsoft was the stock
market's most valuable company. It still
is, but its shares are down 53 percent.

On the market's way up, the belief in stocks spread to most parts of the world. But it
turned out that there was little safety to be
found from international diversification. Japan's market had been depressed for years, but
even it put on a rally in the months
before the United States market peaked. Since then the Nikkei 225 is down more than 60
percent, measured in dollars. The
markets in France and Germany have lost more than half their value, and Britain has done
almost as badly.

Among American companies, some shares have done well since March 2000. Seven of the 30
stocks in the Dow industrials are
up, led by Altria, the former Philip Morris, which has gained 88 percent. Cigarette
litigation did not kill Altria, and its dividend
remains high. Johnson & Johnson, Procter & Gamble and 3M, all deemed boring at the peak
and all losers in the final six months
of the Nasdaq run, are each up at least 50 percent over the last three years.

The strongest part of the American economy has been the housing market, and indexes of
home-building stocks have doubled
since the overall market peaked. NVR, a company that builds and finances homes, trades for
nearly seven times what it was
worth three years ago.

But another industry that has benefited from surprisingly strong sales — autos — has not
won favor on Wall Street. Detroit has
kept sales high, but only with big discounts, and recently there have been signs that
sales may be starting to weaken. Since the
peak, Ford is down 68 percent and General Motors is off 60 percent.

What is most amazing is just how many substantial companies have lost a huge part of their
value since the peak. The list of
companies that are down at least 90 percent includes Lucent, Qwest, JDS Uniphase, Gateway,
LSI Logic, Corning and Sun
Microsystems. Meanwhile, Cisco, Yahoo, EMC, El Paso, AMR, Delta, Motorola, Texas
Instruments, Nextel and AOL have
lost at least 80 percent.

It is a performance that seemed unthinkable three years ago, when it was taken for granted
that big risks brought big returns.
Although the risks must certainly be lower now, far fewer investors are willing to take
them.

http://www.nytimes.com/2003/03/10/business/10PLAC.html?ei=5006&en=ec412c98a0d24444&ex=1047877200&partner=ALTAVISTA&pagewanted=print&position=top

--
    "NEXTEL-1 IT'S NOT JUST NEXTEL"
  Note The New address
Subscribe to Nextel-1: http://www.groups.yahoo.com/subscribe/NEXTEL-1

  "NEXTEL2 FOR iDEN SOFTWARE DEVELOPERS"
Subscribe to Nextel2: http://www.groups.yahoo.com/subscribe/NEXTEL2

  "WIRELESS FORUM HOMELAND SECURITY GROUP"
     The Complete Resource for Wireless Homeland Security.
Subscribe to WFHSG:  http://www.groups.yahoo.com/subscribe/WFHSG