<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
Often overlooked in all the turbulence over the AC situation, is the fact that those small individual investors, including many AC line staff and retirees, who bought and held their AC shares since privatization have been safeguarded over the years by the AC Board's actions. These may not have been in the best long term interests of the company, but it is interesting and worthwhile putting it onto the record.
As I posted the other day, I -- like these other AC shareholders -- am not really out of pocket on my AC investment. In fact, thanks to decisions of the AC Board, we have come out a bit ahead, albeit we could have done a lot better putting that same money into GICs over the same period. But we did not take the bath it appears we did, and did better than any original Nortel shareholders.
Remember, we bought at $8 a share. As shown on the front page of the ROB, these shares rose to the $15 to $16 range three times since 1988, affording an opportunity to sell at least twice before the third spike upward, almost double our money, then repurchase when the stock dropped back down to levels between $4 and $6.
Then came the Onex takeover bid, and rightly or wrongly, the Board responded with a buyback of 60% of all outstanding shares, at around $16, or twice what the original purchasers had paid in 1988. This, in effect gave them back their original investment and a small "profit". And they still retained 40% of their original shares to ride out the balance of the carrier's turbulent trip.
Yes, there are many shareholders who will be adversely affected, the majority of which might be most of you here who own AC through pension funds. As someone pointed out in my previous discussion of this matter, someone bought my shares at $15/$16 back in 1997. But I am pretty sure that someone was not a small investor, employee or other person like myself.
So one bottom line of the Board has been protecting initial, small shareholders and Aeroplan customers in communities where marginal service was maintained. [See my other post for this one.]
If there is a flaw to my assertion, let me have it. But I for one cannot condemn the Board, or RM and his team, as others have. I have been a long time critic of the group as a whole, for being too insular and too much an "old boy's club". But I was impressed by the bold action that was taken over the past two years to respond to the very changed market reality. Right or wrong. This was done while US airlines played their fiddles and watched Rome burn.
I am yet to be convinced otherwise. And it is not for lack of pot shots from the gallery here.</font>
As usual, hindsight is 20/20.
You're hindsight approach is tough to execute with the buy and hold strategy used by most value-minded long term investors.
It has been proven over and over that attempting to time trades against volatility versus buy and hold yeilds lower results in the long term.
Leads one to conclude that few would agree with your analysis.
1D