Prediction of Stock: T

This one was a bit tricky. I think I really went overboard with the amount of research I did, to the point I started to do technical analysis, which I personally try to avoid since it only tells me about the past. But I do think it does have a certain value as temp gauge.


I have been reading some books about forecasting, most notably Superforecasting: The Art and Science of Prediction, and Misbehaving. Those books gave me an idea, find a stock that is currently going up or down drastically, and see if I can use the tools I learned from those books to make a prediction about it's price 6 months from.

1: Can only invest a max of $300 in either a long or short position.
2: Can use either a stock purchase or an option.
3: Cannot long and short at the same time.
4: The prediction can only last 6 month, and at the end of the 6 months, the position must be sold regardless of a loss or profit.
5: If the stock if greater than a 10% loss of value, it must be sold.
6: Any stock in the world is open, not only U.S.
7: A explanation of why the stock prediction went wrong, before the stock was bought.
Stock: AT&T t

Background: The company based in Dallas, Texas. Where it has several markets segments. It is one of only a hand full of nation wide telecom companies in the U.S. & Mexico. At the current moment it has 33% Market share of the U.S. Mobile phone market with Verizon having 38%. The largest area of being Wireline technolog (TV, Internet Cable, phone lines). They also had 2015 with record profits & revenue. They are starting to invest more in their infrastructure such as improved LTE & Fiber Optic networks.
At the current moment their stock sits at the $39 mark, which is close to their yearly high.

Predictions: The stock will go down for the next 3-4 months, and then increase to a record high.

1: After analysis, their recent Q1 showed that their selling of mobile business has been decreasing over the past several quarters. This is in-line with the recent consumer data of mobile phone sales being down over the x-mas period. As well consumer data further showed, that there was a 6% drop in the purchase of mobile phones, worldwide. AT&T's quarterly reports show that they experience a slow down in mobile phone sales after x-mas, even during the same period where other carriers saw an increase in mobile phone sales. AT&T is able to off set those by reducing their cost very accurately, but I think there will be a bit of bigger drop off in mobile phone sales for Q2.

2: The Stock is overbought. There has been a fast and sharp rise in the value of AT&T stock. Using an RSI the stock is osculating between the 66-69 market. Comparing it to previous performances, this is an indication that the stock is overbought. Some investors who bought the stock at the lox 30s will cash out.

3: They are expanding and growing in Mexico, which is highly lucrative market, for AT&T since they have the ability to over-charge their customers of Internet/cell service while still building/improving their infrastructure. At the current moment, their position in Mexico is very limited due to Carlos Sims still having the majority of the market in Mexico, and who will still maintain his large market position in Mexico for many years.

4: With the upcoming Euro & Olympic games, there is no doubt that both customers on the U.S. & Mexico boarder will both go over their data caps, and be charged extra for more data. This is one of AT&Ts largest areas of profit and hence once the summer is over their Q3 & Possibly Q4 profits/revenue will increase dramatically from that business segment. This was the case with Rogers & Bell when during the 2010 Vancouver Olympics, their customers in Canada went over their data plans. I am sure this will be no different.

I know those seem like rather weak arguments, but that is what happens when you have a solid run company with a large market share.

Why the prediction failed: AT&T experienced worse than expected loss sales impacting their cost off-set deeply, resulting in missed EPS expectations. That resulting in AT&T reaching the low 20s. As well their customers did not go over their data plans, which further compounded the company's expected earning from additional data at marked up prices. And that the stock price recovery of the company would take longer than expected.

Start Discussion

Career Advancement Opportunities

November 2022 Investment Banking

  • Jefferies & Company (▲08) 99.6%
  • Lincoln International (= =) 99.3%
  • Financial Technology Partners (+ +) 98.9%
  • Evercore (▽01) 98.5%
  • Bank of America Merrill Lynch (▲01) 98.1%

Overall Employee Satisfaction

November 2022 Investment Banking

  • PJT Partners (= =) 99.6%
  • Evercore (▲02) 99.3%
  • Greenhill (▲05) 98.9%
  • Canaccord Genuity (▲15) 98.5%
  • William Blair (= =) 98.1%

Professional Growth Opportunities

November 2022 Investment Banking

  • PwC Corporate Finance (▲14) 99.6%
  • Lincoln International (▲03) 99.3%
  • Jefferies & Company (▲04) 98.9%
  • William Blair (▽02) 98.5%
  • Evercore (▽01) 98.2%

Total Avg Compensation

November 2022 Investment Banking

  • Director/MD (10) $613
  • Vice President (38) $392
  • Associates (219) $256
  • 2nd Year Analyst (139) $163
  • 3rd+ Year Analyst (19) $160
  • 1st Year Analyst (463) $153
  • Intern/Summer Associate (88) $151
  • Intern/Summer Analyst (336) $92