Really Blew it on RIM!

In order to cover my purchase of more AAPL shares I sold my stake in RIM at $47.80.  I admitted at the time that I wanted to go long on RIM, but I was uncomfortable with how much I had in the market, and how poor the ratings were on the new Blackberry Storm.

When earnings were announced on Thursday with bullish comments about their ‘best start ever’ start to the Christmas season and the fact that they beat their revised (and lowered) estimates, the stock rallied which had me leaving a 11.5% gain on the table!

If I had infinite cash, I would go long on RIM, at the moment I just don’t think there is as much upside opportunity as with AAPL.” So I guess if I had ‘infinite cash’ I would be better off… but then again, I probably wouldn’t spend any time on the stock market.

I am not really upset about this gaffe however, and this is why:

  1. RIM’s results have re-affirmed my view that the key player in the rapidly growing ‘mobile internet’ business, namely RIM and AAPL, are going to see limited impact as a result of market dive brought on by the credit crisis.
  2. A 14% daily gain in the stock as a result of positive news shows that investors are willing to get back into stocks that indicate that they are less sensitive to the negative market conditions (i.e. when AAPL surprises in the next quarter with good results, I should see good gains!)
  3. This shows that companies involved in the telecoms industry may have better resilience to market conditions than others.  Since my day job involves telecom, this might be a good thing.

While doing some Christmas shopping, I followed my friend Justin around to every single wireless store in the mall (I didn’t know there were so many), to see if we could find a Blackberry Storm we could actually try.  At the last store we tried (Bell) they had an early production version that they were not allowed to sell.  I gave it a try, and wasn’t really very impressed with the user interface.  The clicking screen is very much a gimmick I am afraid.

What I didn’t fail to notice was, every single store that got an allotment of the Storm were sold out.  Perhaps the desire for an ‘iPhone’ for those stuck on the Bell/Telus/Other-non-GSM networks (that can’t carry the iPhone, even a hacked one) due to contract obligations was enough to put aside bad reviews and fork out for a Storm.

I am VERY happy that RIM continues to do so well!

Increasing My Position in AAPL, ‘Trying’ to Get Out of RIM

I watched news reports this morning that covered Apple’s annoucement that not only are they participating in their last MacWorld conference, but Steve Jobs’ will not be doing the usual keynote speech at the event.  While Apple claims that this is just the next step in a change of strategy that relies more on their Apple stores, and iTunes to reach out to customers, some of the press coverage decided to renew speculation that Jobs’ health is in trouble.

This, along with analyst downgrades to market perform from outperform (Oppenheimer) and the French government’s ruling that Apple has to allow other carriers in France to sell the iPhone, made for a bad day in Apple stock to the tune of -6.6%.

At first, I was pretty worried, but then I started thinking about the leadership position at Apple.  The market has a perception that Jobs is a ‘genius with a thousand hands’ type of leader, as evidenced by Apple’s decline after his original departure, and its resurgence after his return.  As a result the stock price is heavily influenced by rumours about his health since the expectation is if it fails, so will the company.

This may have been true when he originally left Apple, but I think there is evidence to show he has been able to grow good leaders under him since.  For example, he was the head of Pixar studios which was eventually sold to Disney for >$7 billion dollars, which has since continued to excel with such hits as the Incredibles and, most recently, WALL-E.  Clearly Jobs had set up a system which could continue to succeed in his absence.

No question that the stock will get hit hard if Jobs proves to be ill, but since Apple is unlikely to provide any more detail in the next few months, and I still expect Apple to positively surprise the market over this Christmas season, I am viewing today’s drop in the stock price, and a month-low in the US dollar as a buying opportunity.  I am increasing my position another 20% at $89.31.  For those keeping track, my average cost is now about $115.

In order to pick up more stock, I wanted to sell something else which had less up-side, since I was getting uncomfortable with how much I had in the market.  I am starting to lose faith in the ability of RIM to balk the downward trend in the economy.  Their new Storm was received cooly by reviewers, and appeared to be more of a reaction to Apple iPhone instead of something new and innovative.

Clearly a LOT of Blackberry purchases are driven by enterprise, and trimming costs on cell phones is one of the first things enterprises do when the economy turns sour.  While if I had infinite cash, I would go long on RIM, at the moment I just don’t think there is as much upside opportunity as with AAPL.

IF I can get out of RIM tomorrow that is…   This is what I was greeted with when I logged into my trading account to sell the RIM shares:

TSX Trading Halted All DayIt turns out, aside from 20 minutes at open, the TSX was closed ALL DAY.  Hopefully things will be resolved by market open tomorrow, but with RIM’s earnings coming out at the end of day tomorrow, the TSX’s technical glitches may end up costing me (or maybe saving me) money.  I’ll let you know how it goes…

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