I think any analysis of AT&T has to have a big break in 1983 with
> divesture. So much of the company was changed as was its whole focus
> that pre and post 1983 are totally separate issues.
> Also, the divesture of Lucent and Ayaya (sp?) are a factor as well.
> Stockholders did not necessarily hold on to those companies. Many
> stockholders ended up with a fractional odd lot that is a nuisance to
> keep and they sold it back to the company when they had the chance.
> IMHO, in analyzing the long term investment value of a stock, the
> spinoffs do _not_ count. They're separate companies.
> To me, the question would be: After divesture one held $1,000 of AT&T
> stock. Deduct from that all spinoffs net value (after-sale proceeds)
> at the time of the spinoff. Determine the value of the stock when AT&T
> was bought out. That is the answer.
> Although the question is of historical interest only at this point
> because the company no longer exists, even if the name is continuing.
> Before the 1960s owning stock was primarily for the wealthy. Then,
> stockbrokers decided to market small lots of blue chip companies to
> small investors and everyday people got into the stock market. AT&T
> was the bluest of the blue chips and was a popular stock.
> Changes in the financial market have reverted a bit toward the past
> where more wealthy people own individual stocks. The market has gotten
> too complicated to follow by individuals, with too many machinations
> going on. Individuals are more into mutual funds today. As best I can
> tell, the cost of buying/selling stock has jumped much faster than
> inflation. In the 1960s many people held but a single share of AT&T (I
> was one of them, having received it as a gift). In later years that
> was discouraged with buy backs (as I accepted, it was foolish cashing a
> dividend check for 45c every quarter that I had to get my father to > co-sign).
> I don't know if there are any "blue chip" companies today. The
> business world seems so violatie, where today a company could be
> considered rock-solid and tomorrow it's near bankruptcy. In the old
> days the biggest companies had much more steadiness in the price of
> their stock. Smaller companies and those in riskier ventures had more
> violatility. (But there were once solid companies, like the railroads,
> that fell onto hard times and investors lost out).
Oh there are still blue chip companies. IBM is still one of them though they aren't so much a manufacturer as a service provider now. It's a company that evolved.
I'd also count companies like Microsoft as blue chip too.
And Google is pushing its way toward being a blue chip someday soon.