I never thought I would say this in my entire life.
I am now an AT&T investor.
As of this morning at 9:35 AM EST, I purchased 64 shares of T at \$30.85 USD, totalling \$1974.40 (excluding broker fees of about \$5.00). I think I will definitely purchase more in the future, and it will likely be the primary stock I own.
By all measures, it’s a good stock for me to own over the long term, because:
Its general scale relative to the market; its primary (and really only serious) competitor is Verizon, and Verizon is big enough to purchase the head of the FCC. In a highly regulated market with high moats, this regulatory capture means predictable profits for incumbents.
A long history of not just paying dividends, but increasing dividends over time. The Sure Dividend Newsletter is a great resource for learning more about dividend investing. I’d rather keep the dividends than paying it out to my index fund manager when purchasing an index fund. In addition, market capture by index funds have their own dangers, and as more people invest in index funds (a very good thing), the reward to risk ratio increases, making totally stable purchases financially attractive. Also if I invest and hold a certain amount, I can beat the expense ratio of index funds (this purchase cost around 0.25%, beating the common index fund expense ratio of 0.5%) I enjoy walking the path less traveled.
Specifically for me, some understanding of the underlying technological reality. I know and appreciate that telephone lines are synchronous communications networks. This means every call is guaranteed a set amount of bandwidth along the entire network for the duration of the call by every service along the route. This leads to higher call quality in comparison to VoIP (Voice over Internet Protocol), as TCP is anychronous and packets that arrive late are useless to real-time systems, and UDP drops packets; both lead to silence and static, which affects call quality. This is something inherent to the Internet and cannot be fixed. Telecom network’s synchronous nature also means feature rollouts take place on a network scale, because every service along the route needs to support the increased bandwidth. This forces massive upfront capital expenditures and a long-term rollout schedule, which is good for building moats and ensuring product stability. It also means the kind of creative destruction seen in other fields of tech are less likely in this field.
So, if all of these are great reasons to invest in AT&T, why didn’t I do it sooner?
It’s quite simple. I worked at AT&T and hated it.
The gist of what happened was there was a large hubbub between which network switch provider we would use, Cisco or Arista. A vice president up high dawdled on the decision, which meant the only time I could start on the project (promised in the beginning) was a week before I left. We were slated to use OpenStack, which while it was open-source, was also quite design-by-committee; I learned this from various OpenStack meetups. Design by committee doesn’t work in software; you kind of need a benevolent dictator in order to establish direction. Finally, AT&T’s procurement services were quite slow, leading me to have to hack together a DevStack from computers pitying coworkers could afford to give up. This, combined with mental breakdowns, roommate difficulties, an asshole assistant manager who literally told me to “twiddle my thumbs”, and bad weather, all made my experience miserable. I mentioned this as such to a senior vice president. AT&T never contacted me back about a job, and I was glad of it.
It’s not fair to blame the people at AT&T for all my troubles. After all, it is literally the Frankenstein child of Bell System, where “Mama Bell” was broken up into regional companies, which then slowly merged back together. Like, literally Frankenstein cobbled from different body parts. The systems and processes were bad because divergent tech stacks were merged together, and since senior executives don’t want the company broken up again, they behave in a risk-minimizing fashion. Many people at AT&T were supportive of my career, and I appreciate it now. But it did leave severe mental scarring, and taught me that risk-minimizing has its own risks.
Which leads us to the present day. So I have some money in my bank account, and I don’t know what to do with it. I know that inflation will eat up the monetary value if I keep it in a low-interest savings account. I could also be robbed again and not get a temporary credit back. Minimizing risk by storing my money in a digital mattress will certainly result in the certain risk of depreciation of some sort, either gradual or sudden.
I looked at Sure Dividend’s Top 10 Recommendations and the only stock that I am familiar with is AT&T’s. There’s one other technology company there, and the curators warn it is highly susceptible to business cycles, and competes in a highly changing market. For the other companies, I either know of competitors and don’t understand their product differentation enough, or they’ve reached market saturation and don’t have anywhere to innovate (besides slapping on a new brand).
What to do.
I try and break down the reasons for not buying AT&T. It’s not a great company? Sure it isn’t – but good companies to invest in are not good companies to work for, especially if you’re young and desire meteoric growth in your career trajectory. It doesn’t innovate and won’t be relevant? Humbug! It still innovates – rolling out the next-generation cellular networks isn’t nothing. It also advertises heavily and fights fiercely to keep its territory (one director I respected effectively said how if Google Fiber really became a threat to AT&T, AT&T would fight Google in court for every mile of fiber it laid, destroying Google in its very own Stalingrad). Am I surrendering to cynicism, that I tried to change the system and in the end the system changed me? A little, okay maybe a lot, but I live to fight another day, and that means I still get to choose the hill I wish to die on. I shouldn’t take that for granted; I’m not abandoning all my morals (e.g. I will never invest in a fossil fuels company) and my increased financial leverage may help turn the tide on issues I do care about. In the end though, all this reasoning felt like rationalizations.
Then I remember reading “On Emotional Intelligence” about a CEO who lost everything, all because he couldn’t regulate his emotions:
An Wang chose to create a proprietary operating system despite the fact that the IBM PC was clearly becoming the dominant standard in the industry. This blunder, which contributed to Wang Laboratories’s demise a few years later, was heavily influenced by An Wang’s dislike of IBM. He believed he had been cheated by IBM over a new technology he had invented early in his career. These feelings made him reject a software platform linked to an IBM product even though the platform was provided by a third party, Microsoft.
“On Emotional Intelligence”, Page 63
Jesus. The guy even has the same last name as I do. His story spoke to me. The ability to detach past actions and current emotions from the actions required for the future is essential to success. Seen this way, investing in AT&T would be a demonstrable sign of emotional growth, temprament, and intelligence.
And so that’s what I did.
Here’s to the future. 🍷