For more than two years, you’ve been bombarded with horror stories about the unfortunate victims who were sunk with the ‘Titanic’ of Canadian stocks, Nortel Networks, some of whom apparently are now working on Bay Street (with a monkey and tin cup).

Well, here’s the fresh angle on Nortel.

While the tech company itself has been floundering, some folks have been making a killing on the stock.

But now it’s a new gig. The nightmare stock of investors has become the dream stock of traders who don’t give a hoot about fibreoptics.

It’s The Wild Thing of the Toronto Stock Exchange.

Yes, the one-time 800-pound gorilla of the TSX and darling of Canadian investors and mutual fund managers has become a cheap dancing monkey in the circus that the market has become.

Nortel may be on the ropes as a company but it’s still Canada’s highest- profile stock and a useful bellwether of how dangerous the stock market is these days with all the mixed signals coming out of Wall Street.

Nortel’s schizophrenic tendencies tell you just about everything you need to know about the bear market, and it’s also a sobering reminder of how the old buy-and-hold mantra is looking as worn and tired as a Nortel analyst’s buy recommendation.

In recent months, Nortel has been on a general uptrend but, just as some giddy analysts with their busted crystal balls started to jump on the bandwagon with ambitious targets and forecasts of profitability for 2003 – boom!

The stock tanked again, delivering yet another nail in the coffin of the buy-and-hold investor.

The one-time, must-own blue-chip of Canadians has become a speculative play, playing into the hands of savvy traders and gutsy short-sellers.

If you’re a patient swing trader who got lucky and bought Nortel near its 67-cent bottom of just over three months ago, you could have scored a five-bagger with the stock quintupling to $3.98 as of Jan. 14.

But you could’ve done even better by playing Nortel’s violent swings on the way up.

After the stock hit the $4 range recently, a mere $120.50 off its all-time high, it showed all the legs of a spent marathoner wobbling to the finish line. Within two days, it was chopped liver again, trading as low as $3.16.

Nortel’s daily chart looks like an electrocardiogram (likely that of a Nortel day trader).

Nortel has more mood swings than Michael Jackson. The day the stock plunged to $3.16 at 7:45 a.m. MST, 15 minutes into the trading day, it made a rapid 14-cent rebound by 8:30. Then, it dipped a dime by 9:30. Then, it recovered seven cents by 11 a.m. And then rallied to $3.36 by the close.

With that kind of action, an experienced, well-schooled technical analyst could make a living off Nortel alone.

Nortel trades consistently in a wide range, generally fluctuating in the 10-per-cent range and often as much as the 15-per-cent range, even without major news.

And getting your order filled is never a problem as the stock generally trades between 30 and 70 million shares per day. You can count on the trading to get even wilder this week when Nortel releases its quarterly financials.

Investors are often cautioned against getting attached to stocks or marrying them.

Nortel, in particular, has earned the cold shoulder.

If you’ve been messing around with The Wild Thing, you may be well advised to keep a safe distance.

In other words, no kissing on the lips.

How’s that for a disclaimer?

* STREET TALK: While some analysts have fallen back in love with Nortel, Mark Lucey, an analyst with TD Newcrest, offers a more sobering perspective with a 12-month target of 80 cents US (about $1.25 Cdn).

Lucey also says Nortel may be on the verge of an equity offering.

“We continue to be concerned by Nortel’s balance sheet outlook and would not rule out the possibility of a dilutive equity or quasi-equity offering at some time,” Lucey writes in a research report.

“We have heard that, with the benefit of a strong fourth quarter, there have been marching orders in the field to protect first-quarter sales. This is a short-term bullish signal, but we fear demand will deteriorate through the year primarily as wireless demand slackens.”

* SAGE WORDS: “The bottom line is simply this: Fancy tax shelters, straddle-option strategies and future contracts on gold all make for great conversation at cocktail parties. Forced saving, dollar-cost averaging and compound interest simply make for great cocktail parties.”

– Roy ‘The Wealthy Barber’ from the Canadian best-seller The Wealthy Barber, by David Chilton.



HOT ALBERTA STOCK: Devlan Exploration
DXI-TSX $1.80
Up 30 cents (+20%) on 957,500 shares (for week ending Jan. 17);
Devlan has boasted some impressive staying power, moving up on brisk volume since the Calgary energy junior announced recently a 100-per-cent success rate on five drilling holes. The company expects that success to translate into a doubling of daily oil production. Devlan’s properties are in Alberta and the Northwest Territories.



COLD ALBERTA STOCK: Tesoro Energy
TOG-TSX 12 cents
Down 5 cents (-29.4%) on 11,515,500 shares (for week ending Jan. 17).
Tesoro may be a junior oil and gas company but it trades at big-time volume and sports wildcat volatility even without any major news. The Calgary outfit, coming off a recent spike that doubled its share price, came crashing back to earth. Tesoro recently announced the completion of a private placement at six cents a share that raised $670,400.