Level 3 Communications (LVLT)

Company. Level 3 "is an international communications and information services company and is headquartered in Broomfield, Colorado. The company operates one of the largest communications and Internet backbones in the world." (company website)

LVLT stock chart
loss Bottom line
-66%

Buy. Level 3 was one of the first stocks I bought with my online brokerage account. I had come across the company in the course of some market reasearch that I was doing, and they talked a good story when we visited one of their sites. It was the end of 1999, and the internet stocks were going up, up and away! Who knew that three months later the Nasdaq would peak and the bubble would burst? I sure didn't.

Nasdaq composite 1999 to 2002 shame-faced

Any damn fool could soon see the market was going down. I held onto my shares.

Although my shares had lost 97% of their value by mid-2001, I bought more! I called it dollar cost averaging, but my momma would have called it throwing good money after bad. The only good thing about all this was that the number of shares was small. I can only be thankful that I hadn't learned about buying on margin!

Level 3 made a double bottom in October 2001 ($1.89) and again in February 2002 ($2.15). The Nasdaq would not bottom until October 2002 at 1108, having lost almost 80% of its value.

Sell. I finally decided to clear out these old shares from my portfolio. I got the princely sum of $6.531 per share, a loss of 66%. The loss will offset some of the nice gains I made this month on PLUG, and getting the loss off the books improves my balance sheet. And it will help lessen the tax burden for the first quarter of this year.

I now have just one "legacy" stock in my trading portfolio, dating back to the internet bubble and IPO fever. Although my transactions with that stock are equally egregious, the number of shares is exceedingly small and, in fact, subsequent buys in a rising market have nearly wiped out my loss on that stock. For that matter, other subsequent buys of LVLT have risen enough to wipe out the loss I took today, but I am holding onto them for the current uptrend to avoid a wash-sale if possible.

Full disclosure: There is one other stock that was acquired through an act of colossal stupidity and bad judgment, not as a result of chasing hot internet stocks. That tale will be told in due time.