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Telephone, wireless, and internet communications is becoming increasingly critical to simply live and function in modern society and commerce. However, the volatility of the industry might make certain aspects of investing in any telecommunications company dicey -- competition is likely to be fierce in upcoming years, and also a new form of technology developed by a rival company might weaken at&T's competitive edge. Not even the most perfect formula can predict changes in technology or a new regulatory environment that may affect the price of a stock.
In the short-term, at&T looks strong, making it a good bankable retirement stock, although its price is quite high. A wealthy investor like Beebee with money to burn might want to select a slightly more risky company, meaning that it might not be the best choice for him. Also, Beebee seems to have a guaranteed income not based in investments at all, but simply based upon the royalties for his 'invention.' This means that, no matter how wealthy the other investor...
Also, both investors may wish to make use of derivatives, and purchase an option to buy, with a stock strike price within a certain range. Beebee would be more likely to only wish to buy the stock if it goes extremely high, while his investing partner, again keeping his eye upon retirement, might select a lower price to see a quicker profit and save this money for retirement ("Derivatives explained," Financial Pipeline).
Works Cited
Derivatives Explained." Financial Pipeline. Retrieved 18 Nov 2007 at http://www.finpipe.com/derivatives2.htm
Preferred vs. Common Stock." Created by Ameritrade in 1999. Updated in 2003. Retrieved 18 Nov 2007 at http://www.ameritradefinancial.com/educationv2/fhtml/stocksfunds/prevscom.fhtml#overview_preferred
Works Cited
Derivatives Explained." Financial Pipeline. Retrieved 18 Nov 2007 at http://www.finpipe.com/derivatives2.htm
Preferred vs. Common Stock." Created by Ameritrade in 1999. Updated in 2003. Retrieved 18 Nov 2007 at http://www.ameritradefinancial.com/educationv2/fhtml/stocksfunds/prevscom.fhtml#overview_preferred
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