“Come on guys, have faith. He’s dollar cost averaging in turn around companies, that always works.” - Bill Miller
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
i just wish i can understand his rationale cause I really admire his skills….
from press release, he just says he feels the company is not going bankrupt, has strong people and believes in management……
rim will problably be operating for sometime to come,but i’m not exactly sold on the morale of the companny (which from my sources tell me ppl want to leave asap) and the management…..
He’s too stubborn to admit he is wrong, like Bruce Berkowitz with STJ (St Jude’s Medical).
Maybe it’s a Canadian loyalty thing since FFX and RIMM are both based there (just kidding, by all accounts Watsa seems to be as coldly rational and straight-and-narrow as Warren E Buffett.)
Me, I am buying NOK (Nokia) with my play money. Probably lose it all, but 1-in-100 chance they will be the next AAPL (Apple) and turn around. Who needs CFA when NOK sells for $100/share? Seriously, I’ll be OK if they do what Motorola did and survive the slump. Even better if they don’t pay some hotshot engineer from Qualcomm $100 million pa to come be a co-CEO.
This is why I think it’s important to diversify IMO. I see the point of “put more money behind your best ideas”, but I think you also need to think about whether one position can slap you if you’re wrong. Especially in a turnaround case where they may underperform for an extended period. I think the best way to reconcile these issues is to go ahead with a concentrated portfolio, but weight your bets equally….you may see lower returns that way but you have to also think about the probability of each bet working out….totally unknown..
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
RIM will not be around much longer. They’ll get some money for their patents, but their operations will cease. There’s a big risk for businesses to continue to support Blackberries. When RIM goes out of business, their ability to provide secure cell/data service will probably also stop. Doesn’t make any sense for a business to stick around. Now that there are viable alternatives in the marketplace (we allow employees to use Good for Enterprise on their iPhones now) the fall of RIM will be that much quicker.
DOn’t think Fairfax is hoping for a turnaround; I think there’s hoping that RIM will be bought at a nice premium. But I’m wondering, who is in the position to buy RIM as a strategic partnership? Maybe Nokia or MSFT? MSFT has the money but I’m not sure they could make it work as a partnership. Thoughts?
Being Born Wealthy > Being Jewish or WASPY > Born Pretty > Top 5 MBA > CFA > Avg MBA > Born middle class > Born lower class > Born in crack house > Working in IT but looking to switch to buyside
..i think a lot of value investors ground their thesis on their belief a company is under valued or selling below replacement value and therefore a suiter is going to come and realize that value through an acquisition…..
i don’t think there is anything wrong with that at all…..its actually central to “value investing” ….
By that logic any buying decision is “value investing”, except when the stock goes to 0. Of course you think there’s “value” when you buy a stock, or why else would you buy it? Then you can say “a black swan ate my investment!” if a stock (RIM) goes to 0. It wasn’t my fault! Look at the black swan!
value investing is buying based on business fundamentals whereas TA is based on expectations that someone else is going to buy for whatever reasons….they’re fundamentally different……
Since when is hoping for a taekover, a valid value strategy?
Only Watsa knows WTF he is doing.
Thats actually a key catalyst looked for by many value investors.
As for RIM, I’d like to see what their emerging markets sales look like and what barriers for entry exist in those markets for competing products before I write them off completely. In terms of developed markets I think they are dead in the water and its unlikely that they have products in their pipeline that can win back market share. However, with their valuations being what they are, if they have strong revenue growth in emerging markets they may be a compelling investment especially if you consider their patent/technology portfolio, elements of which they can likely sell/licence.
It would take alot of due dilligence on my part to understand what RIM looks like as an investment and where I am at right now and with the weather being as nice as it is, I think I am going to invest that time and energy working on my tan.
i just received the annual report in the mail today……..i’m thinking much of what will occur will happen after the release of BB10….but damm this thing looks cheap….it really reminds me of what i was reading in graham when he said sometimes companies trade at 20x and a few years after that they go to 2-3x……just from the look of it, rim should be worth around 15 bucks on breakup value…maybe slightly less….but i’ll dig deeper…
Like Buffett said, own a stock as if the market will be shut down for the next 10 years. I have heard he is a value investor or something.
Hoping for a takeover (when there is no impending merger) is not a value strategy. Your happiness depends on a specific event and not on the market being a weighing machine in the long run.
Like I said, maybe Watsa sees real value and discount to intrinsic value in RIM’s price. I don’t. He might be right but no one else I know has a clue what he is doing.
I think RIMM could be a good acquisition for a firm that’s looking to enter the space. The only other way to enter the space is to develop your own new OS with an ecosystem, which is too hard.
Someone like say Panasonic….Sony….Dell etc.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
Value is based on fundamentals. Buying something that has is an attractive acquisition is based on their fundamentals. Who cares whether the market starts buying the stock, or a single indvidual buys it all and goes private? The point is you bought a company that was undervalued and the plan is that a person (or people) will realize that its undervalued and buy it for a price that wil make you some money.
I have never looked at this stock so I don’t really have an opinion, but I’m wondering for you longs / supporters – if it’s such a good deal, why hasn’t it been bought out already? Surely Microsoft of whomever must have looked at RIMM and either passed or been rebuffed on their offer. I’m not saying it won’t get sold eventually, but you have to think discussions have already taken place and a deal could not be reached, so if you’re long, why now?
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
expecting a takeout is certainly a value investing catalyst……….read Greenberg on replacement value…
technically, a takeout is basically a private buyer valuing the asset based on business fundamentals….
To be a true value investing catalyst, the company needs to be accreting value in some way, which means you could hold it at the current price whether it gets bought out or not. Is RIMM growing its value? I’m guessing no. Excluding all of the cash, what is the vlaue of RIMM, discounting that they may do something stupid with the cash? And that’s assuming the business is not terminal (I don’t know).
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
The main problem holding back a possible acquisition of RIMM is possibly the lack of a strategic plan - what will they do with RIMM? The only possible entities I think are electronics firms who want to move up the value chain and make their own smartphones with software integrated, rather than simply making commoditized hardware for Android phones. That will not be easy however, but I do think that will make RIMM to valuable too fail, and an acqusition likely.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
I think RIMM will have some short term upward momentum in Q4 2012 but over the long term of the next 5 years I would rather be holding goog or msft. Due to a higher s&p and improving unemployment numbers I think will be seeing higher consumer spending in 1Q calendar 2013 which should help the BB10 sales in the US. Also by this time, RIMM should have implemented all of its CORE program expense reductions and taken the one time $350 million restructuring charges. The timing should result in a new product with improved operating margins. It would be stupid to sell just their service business because they need steady revenues that will likely follow gdp growth. The other positive I took from them was that overall subscriber base in fiscal 1Q 2013 grew everywhere except North America and they are going to focus on growing internationally. I’m not sure what the barriers are but i’d imagine eventually apple or samsung will focus more on the regions. If they can improve in the US and steadily grow internationally then they should be ok. I don’t fully understand the forces against RIMM but if the stock is trading around $5 in mid Nov I’ll buy it.
i read the annual report over the weekend……the company is making improvements (cost cutting plan)…however, i have noticed the company has a way of burning cash as well (they always spend their free cash)…i won’t delve into the business specifics as i’m sure you’re all aware of its position
..i’m not buying at the moment…the best thing about the company in my opininon is that Watsa is the biggest shareholder and on board…he can help them avoid dong dumb things which is what this company has been doing….
Well, if the stock goes up, they’ll get big bonuses. If it goes down, they lose a bunch of someone else’s money..
“I’m a CPA! I got money b***h!”
Fairfax isn’t a mutual fund its actually an insurance company with a hedge fund wrapper similar to BRK.B….
i’m very surrised actually to see him jump into RIM in a major way………..
Yeah this is truly bizarre. Tech, turnaround….this is value investing heresy.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
“Come on guys, have faith. He’s dollar cost averaging in turn around companies, that always works.” - Bill Miller
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
i just wish i can understand his rationale cause I really admire his skills….
from press release, he just says he feels the company is not going bankrupt, has strong people and believes in management……
rim will problably be operating for sometime to come,but i’m not exactly sold on the morale of the companny (which from my sources tell me ppl want to leave asap) and the management…..
He’s too stubborn to admit he is wrong, like Bruce Berkowitz with STJ (St Jude’s Medical).
Maybe it’s a Canadian loyalty thing since FFX and RIMM are both based there (just kidding, by all accounts Watsa seems to be as coldly rational and straight-and-narrow as Warren E Buffett.)
Me, I am buying NOK (Nokia) with my play money. Probably lose it all, but 1-in-100 chance they will be the next AAPL (Apple) and turn around. Who needs CFA when NOK sells for $100/share? Seriously, I’ll be OK if they do what Motorola did and survive the slump. Even better if they don’t pay some hotshot engineer from Qualcomm $100 million pa to come be a co-CEO.
--
One Rec Ho
This is why I think it’s important to diversify IMO. I see the point of “put more money behind your best ideas”, but I think you also need to think about whether one position can slap you if you’re wrong. Especially in a turnaround case where they may underperform for an extended period. I think the best way to reconcile these issues is to go ahead with a concentrated portfolio, but weight your bets equally….you may see lower returns that way but you have to also think about the probability of each bet working out….totally unknown..
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
RIM will not be around much longer. They’ll get some money for their patents, but their operations will cease. There’s a big risk for businesses to continue to support Blackberries. When RIM goes out of business, their ability to provide secure cell/data service will probably also stop. Doesn’t make any sense for a business to stick around. Now that there are viable alternatives in the marketplace (we allow employees to use Good for Enterprise on their iPhones now) the fall of RIM will be that much quicker.
Jan ‘14 5 strike puts trading for a buck
Studying With
LOL just saw this. That guy is always a classic for me.
Studying With
this company was an epic short of 2011..
DOn’t think Fairfax is hoping for a turnaround; I think there’s hoping that RIM will be bought at a nice premium. But I’m wondering, who is in the position to buy RIM as a strategic partnership? Maybe Nokia or MSFT? MSFT has the money but I’m not sure they could make it work as a partnership. Thoughts?
Being Born Wealthy > Being Jewish or WASPY > Born Pretty > Top 5 MBA > CFA > Avg MBA > Born middle class > Born lower class > Born in crack house > Working in IT but looking to switch to buyside
Since when is hoping for a taekover, a valid value strategy?
Only Watsa knows WTF he is doing.
--
One Rec Ho
..i think a lot of value investors ground their thesis on their belief a company is under valued or selling below replacement value and therefore a suiter is going to come and realize that value through an acquisition…..
i don’t think there is anything wrong with that at all…..its actually central to “value investing” ….
By that logic any buying decision is “value investing”, except when the stock goes to 0. Of course you think there’s “value” when you buy a stock, or why else would you buy it? Then you can say “a black swan ate my investment!” if a stock (RIM) goes to 0. It wasn’t my fault! Look at the black swan!
value investing is buying based on business fundamentals whereas TA is based on expectations that someone else is going to buy for whatever reasons….they’re fundamentally different……
Thats actually a key catalyst looked for by many value investors.
As for RIM, I’d like to see what their emerging markets sales look like and what barriers for entry exist in those markets for competing products before I write them off completely. In terms of developed markets I think they are dead in the water and its unlikely that they have products in their pipeline that can win back market share. However, with their valuations being what they are, if they have strong revenue growth in emerging markets they may be a compelling investment especially if you consider their patent/technology portfolio, elements of which they can likely sell/licence.
It would take alot of due dilligence on my part to understand what RIM looks like as an investment and where I am at right now and with the weather being as nice as it is, I think I am going to invest that time and energy working on my tan.
i just received the annual report in the mail today……..i’m thinking much of what will occur will happen after the release of BB10….but damm this thing looks cheap….it really reminds me of what i was reading in graham when he said sometimes companies trade at 20x and a few years after that they go to 2-3x……just from the look of it, rim should be worth around 15 bucks on breakup value…maybe slightly less….but i’ll dig deeper…
Like Buffett said, own a stock as if the market will be shut down for the next 10 years. I have heard he is a value investor or something.
Hoping for a takeover (when there is no impending merger) is not a value strategy. Your happiness depends on a specific event and not on the market being a weighing machine in the long run.
Like I said, maybe Watsa sees real value and discount to intrinsic value in RIM’s price. I don’t. He might be right but no one else I know has a clue what he is doing.
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One Rec Ho
To be fair, RIMM is sitting on lotsa cash. Whether stockholders get any of that, remains to be seen.
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One Rec Ho
I think RIMM could be a good acquisition for a firm that’s looking to enter the space. The only other way to enter the space is to develop your own new OS with an ecosystem, which is too hard.
Someone like say Panasonic….Sony….Dell etc.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
expecting a takeout is certainly a value investing catalyst……….read Greenberg on replacement value…
technically, a takeout is basically a private buyer valuing the asset based on business fundamentals….
Maybe I missed something, but Watsa himself is not buying all of RIMM or taking it private (is he?)
Hoping that some white knight would come along and do it for him is “hold and hope” investing, not value investing.
If he is in fact taking over RIMM then you may be right, he likes how cheap the assets are.
--
One Rec Ho
Studying With
Value is based on fundamentals. Buying something that has is an attractive acquisition is based on their fundamentals. Who cares whether the market starts buying the stock, or a single indvidual buys it all and goes private? The point is you bought a company that was undervalued and the plan is that a person (or people) will realize that its undervalued and buy it for a price that wil make you some money.
I have never looked at this stock so I don’t really have an opinion, but I’m wondering for you longs / supporters – if it’s such a good deal, why hasn’t it been bought out already? Surely Microsoft of whomever must have looked at RIMM and either passed or been rebuffed on their offer. I’m not saying it won’t get sold eventually, but you have to think discussions have already taken place and a deal could not be reached, so if you’re long, why now?
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
To be a true value investing catalyst, the company needs to be accreting value in some way, which means you could hold it at the current price whether it gets bought out or not. Is RIMM growing its value? I’m guessing no. Excluding all of the cash, what is the vlaue of RIMM, discounting that they may do something stupid with the cash? And that’s assuming the business is not terminal (I don’t know).
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
The main problem holding back a possible acquisition of RIMM is possibly the lack of a strategic plan - what will they do with RIMM? The only possible entities I think are electronics firms who want to move up the value chain and make their own smartphones with software integrated, rather than simply making commoditized hardware for Android phones. That will not be easy however, but I do think that will make RIMM to valuable too fail, and an acqusition likely.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
I think RIMM will have some short term upward momentum in Q4 2012 but over the long term of the next 5 years I would rather be holding goog or msft. Due to a higher s&p and improving unemployment numbers I think will be seeing higher consumer spending in 1Q calendar 2013 which should help the BB10 sales in the US. Also by this time, RIMM should have implemented all of its CORE program expense reductions and taken the one time $350 million restructuring charges. The timing should result in a new product with improved operating margins. It would be stupid to sell just their service business because they need steady revenues that will likely follow gdp growth. The other positive I took from them was that overall subscriber base in fiscal 1Q 2013 grew everywhere except North America and they are going to focus on growing internationally. I’m not sure what the barriers are but i’d imagine eventually apple or samsung will focus more on the regions. If they can improve in the US and steadily grow internationally then they should be ok. I don’t fully understand the forces against RIMM but if the stock is trading around $5 in mid Nov I’ll buy it.
i read the annual report over the weekend……the company is making improvements (cost cutting plan)…however, i have noticed the company has a way of burning cash as well (they always spend their free cash)…i won’t delve into the business specifics as i’m sure you’re all aware of its position
..i’m not buying at the moment…the best thing about the company in my opininon is that Watsa is the biggest shareholder and on board…he can help them avoid dong dumb things which is what this company has been doing….
Funny how Jim Balsillie wanted to buy a NHL team a few years ago and now all he can afford is a CFL team if he’s lucky.
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