Telstra shares good or bad

James
So what do you suggest as an alternative?
People need to live somewhere so as long as a property isn't costing us much and we are not using our own money it should be ok. Right?

How can you say that?
Will there be implications of a TLS split into 2 entities?
Lets assume that the split will only hurt the shares in the short term and they will be up to $3 by Xmas 2011
Do you think the +10% dividend will still be maintained?

 

In regards to Telstra, my view is that the current dividends rate represents a cheap buy. Long term with the break-up this could have impact on revenue streams but also could also cause troubles with the allocation of debt.

Telstra splitting into 2 companies has various implications but this is talks only. Telstra no doubt have been a significant under-performer considering the growth in the IT telecommunications industry over the past 10 years. Short term, when everyone is selling this is when you look at opportunities in companies such as Telstra.

Fundamentally long term - their structure of there debt and repayment of these is a big question mark, especially if they wish to maintain current dividend rates.

In terms of housing, yes people need a place. More at those looking at property as an investment. We are now at a range of 7.5 times (medium household income/median home prices) and around the world, at these levels the bubble burst. All incentives removed from 2009 is now starting to flow through to the market. Cost of funding for banks will only continue to tighten and hence this will be reflective in i/r to consumers irrespective of the RBA.

 

That price back then

Well, 6 months down the track, with foresight back then and hindsight now, I am happy to say 2.66 was a good price for TLS at that time.

Did well there.