Jim (cont'd):     

Alright, before you buy this one… you need to understand why the big down grade yesterday I thought was completely unfair, if not ridiculous… rhetorically speaking, libelous… Stanford Bernstein downgraded Verizon from neutral to underweight…. What does that mean?… Let’s bust that jibberish. That means from hold to sell. Then they took down their 2009 earnings per share estimate for Verizon by 12%… to $2.43, that is the lowest number on the street. And they also took their price target from $32 to $27.… The basic jest, was that all Verizon’s businesses…. everyone of them, wireless, enterprise, Telco… will do even worse than the streets already negative expectations… because Telco companies are now more cyclical… meaning more dependent on a strong or at least decent economy… then the consensus estimates and evaluations suggest…

▼   ▼   ▼   ▼   ▼

Now… wait a second…. wait a second. Forget the fact that the market is now in love with the cyclicals… and therefore Verizon (VZ) should actually be bought not sold. If you really believe in this thesis… I humbly beg to differ with this malicious… if not hellacious downgrade… Over the last 90 days, the consensus estimate for Verizon’s 2009 earnings have already fallen from 286 to 268.… A lot of the guys have already downgraded this thing…. I think the expectations have come down enough, frankly.

In the downgrade, Stanford Bernstein, estimates that nets wireless subscribers dishes will decrease by 40 %, 45%… compared to the consensus… on the street… which is for 20 to 25% decrease…but given that Sprint has kind of been floating here… and that Verizon has looked to be taken share in the third quarter for that very reason. I have to believe that wireless business will be better… look at the hand I’ve got here…. they told me not to drop them.. cause it is like the pages… like I care… Alright, anyway … um, better let the guys… see I think it is going to be much better than what the Stanford Bernstein guys expect… plus, here is what I think is the phone number of the page… uh, the Blackberry storm… the touch screen iPhone competitor… if not the iPhone killer… exclusively distributed by Verizon. Is now sold out. Sold out nation wide just a couple of days after it released… according to a channel check done by Lazard, and by Cramer… Most of these phones sold out within a few hours… and yes I would still be a buyer of Research In Motion… I think that is the page’s girlfriend… the maker of the Blackberry, even though it is up here at $46.

Then the naysayers take the role out of FiOs… Verizon’s triple play voice, video, and data service… as a negative… a negative. Because they think as more people drop their land lines and switch to using only cell phones… Verizon’s (VZ) lower margin video revenue will replace it’s higher margin traditional Telco revenue… I think this is nuts… and not just because I happen to be a happy FiOs subscriber. We know Verizon is taking share… in the 3rd quarter, FiOS already had a 20% penetration in the markets where it is available. That is what I call a cyclular growth trend… people switching from cable to their phone company to get TV and internet… I don’t think that that is going to be stopped by a nasty recession. That is not going to jeopardize it. Plus, the new internet broadband TV that was just introduced at the consumer electronics show this week… it needs stuff like FiOS… needs phone lines to work… I think… digital phone lines. I think that this is the next big thing… I mean it is so big that I would actually think of buying Best Buy (BBY) off of it… And even this bearish analyst at Stanford Bernstein admits that the Verizon dividend… which the company by the way just raised 7% is protected.. If the stock goes to this guys price target of 27 smackers… you got a 6.8% yield… oh man, you know what I would do… I would be buying hand over fist. But so would everyone else. The idea that Verizon is more cyclical than we thing is frankly dead wrong… This isn’t Chrysler… This is not General Motors… This is not a steel company… This is not an aluminum company. It is dynamic. It’s recession resistant. Not recession proof… close to it though… Look I have to tell you people are confusing this company they do not understand that this is not a giant cyclic for heavens sake.

Now, here is what I think you gotta do. I think you gotta buy… well first we will look at some of the positives. Microsoft (MSFT) is working on a deal to become the default search provider on all Verizon wireless cell phones… and Mr. Softy offered twice what Google was willing to pay…Steve Ballmer pay it up. And the combined value of the two deals could top a billion dollars. How could the fact Verizon Wireless… currently owned 50 50 with Vodaphone… is one of the few businesses that banks want to loan money to. I mean this company closed a $17 billion syndicated loan, that is the largest around back on December 11th. At an interest rate that is not expensive… especially in this environment. Don’t forget all the cost savings coming from the All-Tel merger which VZ bought on the cheap… and bought before Obama moves the anti-trust division from Congress to the Justice department…

Even if things turn out to be bad as the downgrade suggests… something I find unlikely. I would still buy this Dow Star right here, if only for the dividend. And we want to have a mixture of stocks this week that we like of the Dow with some dividends.

Here’s the bottom line…

▼   ▼   ▼   ▼   ▼

The Bottom Line!:     Verizon (VZ), with that juicy 5.8% yield, is absolutely one of my top five favorite stocks in the Dow… It is a rock star. It can ride out the recession while they pay you to wait for recovery. Let me just give you full disclosure right here, I think it is important okay…. I have not… and will not accept any Verizon tickets to the big Eagle Giants game. Even though I have heard that they have the best seats in the house.

One man’s trash could be another man’s treasure... I think VZ could be a buy in spite of the downgrade... My second pick for Dow Jones All-Stars of 09 is… Verizon.