For the long term thrill seeker

This is the story I didn't have to write, that is, if I was a coward. However, as the opposite is the case, let me announce that I will give you a last minute assessment of the very hyped T3 share sale.

The Buffet effect
In an earlier Yahoo! article I hid behind a piece of advice of one of the world's greatest investors - Warren Buffet. Buffet's mystique and his reputation for being market savvy has given him the nickname of the Oracle of Idaho. And it's not because he looks like a potato!

Buffet has some simple investment rules and two of them make you think twice about Telstra. The first is: do you understand the business? The second is: would you buy the business instead of looking simply at the share?

McDonald's and Coke
He has bought the likes of Coca-Cola and McDonald's because he basically saw them as businesses people we were going to grow up with for a hell of a long time.

The Telstra tale
Telstra has a brand we all know but as technology changes, regulators get involved and government-ownership changes, the business becomes very hard to comprehend.

Also the three amigos headed up by Telstra's new boss Sol Trujillo are often scathingly assessed in the media for excessive pay and share price falls but no case has yet been proved that they are bad managers for the future of the business.

Switzer's review
I think Telstra is a blue chip stock turned a speculator but given the publicity and the number of questions I have been receiving, I undertook some investigations based on some pretty shrewd share assessors. These guys spend their whole life - yes, even their sleeping time! - thinking about the businesses underlying the shares they may tip or reject.

Talking to those in the know
Roger Montgomery from Clime Asset Management has never been a great fan of Telstra. In fact, when T2 was unleashed in 1999 selling for $7.40, his numbers said it was worth $2.69 a share!

Right now, he values it at $2.86 and that's despite the fact that the market is paying close to $4.

Even given that he believes the Telstra business model will change and the company is likely to benefit from the changes that come out of not being owned by the Federal Government.

He says the big returns on the $2 instalment of 28 cents a year or 14% in the first year will help keep the overall Telstra share price up. He thinks the second year will bring at least a 20 cents dividend, which means 10%.

As the business model changes he sees even more upside in the long-term and so advises it is a decent buy for the long-term players as well.

Another expert
Steven Johnson, the managing director of The Intelligent Investor business only worries about what the Australian Competition and Consumer Commission (ACCC) and a Government might do in the future. Telstra's new 3G product does not, currently, fall under the watchful eyes of the ACCC and this provides scope for Telstra to ramp up its results. But who knows what happens in the future.

Despite a belief that phone calls will be free in 10 year's time, Johnson believes Telstra's dominance in the market will mean it will be the greatest beneficiary of technological innovations that could be seen as a threat to its business.

Value in Telstra
Given that existing shareholders have been offered some interesting carrots to buy more and given these hard-headed analysts, along many others see value in the play at these prices, it is not hard to see why many speculators will be willing to give this speculative stock a punt.

Note, I am not saying it a blue chip investment but is an interesting one for long-term thrillseekers. Good luck.

Click here to visit Peter Switzer's website