Apple Destroying RIM (Part II)

Margie is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Yesterday I penned a column about Research In Motion (NASDAQ: BBRY), where having noted that RIM’s stock has almost doubled, I made the following two negative comments-

1.  I don't have a lot of faith in RIM's management, as they publicly stated at the outset of the iPhone that users would never want phones with a shorter battery life, and screens so large you could barely pocket them.  Obviously management was dead wrong. 

2.  That I believe Research In Motion was very unlikely to make a resurgence seeing as though they have lost the vast swaths of their user base.  I cited the fact that not only have people I personally know who were former champions of the Blackberry switched over to the iPhone, but recently a high percentage of people I have met at parties or through friends carrying the iPhone 5 had specifically waited for it to come out so they could upgrade.  What I found especially interesting, was that almost all those had specifically waited to upgrade, had traded in their Blackberry for it. 

I therefore discounted the recent doubling of RIM's stock price essentially as a head fake, stating that RIM had lost most of their loyal base.  And boy did the comments fly in from readers.  One questioned whether I had a second grade education, others called me stupid, and unscientific, others still worse were deleted before I got a chance to read them thankfully.

Shares Tank

So what happened the day my column was published? Quoting  an article from Motley Fool analyst Andrew Tonner: "RIMM's shares crumbled today, falling a startling 10.5% on news that its share of the U.S. smartphone market has crumbled over the past 12 months. The report from Kantar Media revealed that the Canadian handset maker's share had fallen from 8.5% to a meager 1.6%, which naturally spooked investors."

"That wasn't the only bad news for Research In Motion that the report contained. Perhaps more alarming than the American market figures alone, RIMM lost ground in nearly every market reported in the survey, with Germany being the lone winner, where it increased its market share 0.9%."

Was It Luck?

The timing- absolutely.  However, the part that was not luck, was the expression in numerical figures of what I saw taking place on the street over the last couple of months.

The Takeaway

I am not trying to boast here.  I have a very specific point.  If you all are able to observe and act on something ahead of the analysts publishing it as a statistical figure than you are going to be ahead of the game.  That's how you make money.  When the information becomes available for everybody else in the form of published figures stamped by a top investment bank, the market, being an often efficient mechanism, will quickly discount the new information into the stock's price. 

Most investors want to wait for confirmation from a higher power- Wall Street, and if you do this you become part of the herd, rather than anticipating the direction the herd will move and positioning yourself to reap the spoils of the stampede.

Numbers and ratios have their place, they are important, but often in investing simple observation can keep you ahead of the curve.  We have all missed opportunities of this nature.  When I saw lines outside the Apple (NASDAQ: AAPL) store for the original iPhone, I failed to purchase shares of stock in the company.  Same after my friend showed me her iPad and told me her whole office was looking at it with googly eyes.  I completely ignored what I saw, wanting instead to wait for the numbers to show in a report from an analyst at Goldman Sachs, because at the time I believed that's what good investing was.

My point in all this is Not whether RIM might or might not ultimately be successful, but rather that investing is much more than waiting for and analyzing numbers put out by analysts.  Trust what you see and experience.  You'll probably be right more often than you are wrong.

margiecfl has a long position in Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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