Investing

Good Time To Buy RIM?

Investing

Is it a good time to buy RIM stock? I’d say so. On September 25th, RIM stock took a nasty dive. Why? Investors weren’t happy with earnings forecast moving forward, doubting RIM’s business model. In my opinion, this dive is short term – RIM will bounce back. However, let’s talk long term investing in RIM.
RIM_Stock_Dive

Critics quickly justified RIM’s fall from grace September 25th, pegging the lower earnings forecast to a weakened and questionable business model. Goldman Sachs commented “The failure of RIM’s new products (Javelin and Tour) to drive similar growth in new subscriber adds compared to prior launches makes us doubt RIM’s ability to maintain share in North America,”. Goldman, like RIM’s other critics, are worried about RIM’s consumer business model, citing its consumer line of Blackberry’s as the future to bigger growth and earnings.

I do agree on some level that the consumer line can add more revenue to RIM’s operations. However, one cannot forget RIM’s core business model is the Corporate/ Government sector. And when the ecnomy picks up and the developing world continues building infrastracture and businesses, RIM will supply them. RIM will supply corporations and government in the long run because of security. RIM’s servers are rock solid. I don’t think an iPhone can live up to that same level of security.

Canadian Cell Phone Providers Uncompetitive

Investing

Walk into Bell, Telus and Rogers and the prices just hit you. Why should we pay $699 (no contract) for a Blackberry Storm? Well, I called Bell today and asked that question. The ‘customer care’ rep had no answer.

Hold on, Blackberry’s are made in Canada and we pay more to hold one than our friends to the South? But, don’t blame it on RIM, blame it on our fat, overweight, greedy cell providers… oh and the government – but that’s a different story.

Financial Post has done some recent digging and it can be safely said, the telecom industry in this country is at an appalling state. “Canada’s wireless industry is one of the weakest in the developed world”. And thats not even the kicker. Merrill Lynch ranks current Canadian wireless penetration at 65% – just ahead of Indonesia and Iraq. Just ahead of Indonesia and Iraq? Wow.

So, what this means it that we’re getting screwed. Among developed nations Canada ranks dead last in penetration, meaning that competition is extremely low in this country. And we pay a higher price because of this fact.

So what does this mean for Bell, Telus and Rogers stocks? Well, for now they are riding high but at the same time shaking in their boots. Why? Because a group of new wireless providers are ready to crash their party.

Soon you’ll be seeing ads for Globealive, Shaw, Quebecor selling phones to you. Take a peak at Globealive’s Wind Mobile website – they actually want to treat us as PARTNERS, not lowly, desperate customers.rim-blackberry-bold.

In 2008, Canada held a spectrum auction, meaning the federal Government put wireless space up for sale. So, companies jumped on the opportunity, bid on wireless regions in Canada, some coming out as nation- wide wireless providers and others not.

I have a long term sell on Bell, Telus and Rogers. At the moment they’ll suck as much money out of us until the party ends. Wireless Intelligence indicated that as of the end of Q1 2009, profit margins for Canadian wireless providers were amongst the highest in the developed world – about 44%. Theres no stopping them from selling us $699 Blackberry’s… until the new kids in town arrive. Look forward to healthy competition, lower prices, better phones in the near future.

Analysts will put an axe through Rogers, Telus and Bell, once profit margins on wireless divisions are squeezed due to increased competition. But analysts aside, we – consumers – will determine the fall of these behemoths.

Does Increase in Starbucks Spending Mean the End of Recession?

Investing

starbucks

I have seen more and more people drinking Starbucks. Does this signal the end of the recession?

When the financial crisis hit the U.S. , Starbucks suffered from cut back in consumer spending. In the news, reporters claimed consumers slashed Starbucks coffee from their daily routine in order pay off credit cards, fill up gas, and buy groceries.

So logically, an increase in Starbucks spending should mean that consumers are again confident in the economy and their financial status, thus signalling a broader trend in increased consumer spending i.e. cars, houses that will thrust us out of recession for good.

Invest in Starbucks.

Warren Buffets Investing Lessons from Financial Crisis 2008

Investing

Warren_Buffet

Warren Buffet. Investor extraordinaire and one of the rishest individuals in the world. He is also one of the calmest individuals in the world. The financial crisis 2008 did not sway him like many investors, politicians etc. In fact, Warren Buffet was so confident in the strength of the U.S. and world economy that he plowed money into GE, Goldman Sachs and BYD near the low point of the financial crisis.

I like Warren Buffet’s lesson here. Buy stocks when the market is at a low point. The credo to buy low and sell high is very important to investing. Warren Buffet hits it home when he says: “Be fearful when others are greedy and greedy when others are fearful”. With Buffets logic, when investors are greedy stocks are inflated and when investors are fearful stocks are low.

Another Buffet investing lesson comes from what stocks he invested in during the financial crisis. Is every stock out there a good buy when the stock is low? No. Buffet would be the first to stress a stock is literally a piece of a company. And if you buy a piece of a terrible company, you own a piece of a terrible company. GE, Goldman Sachs and BYD are great companies. Warren Buffet scored by investing in these stocks when prices were depressed.

My Top 10 Investing Tips

Investing

My Top 10 Investing Tips are the result of 6 years of investing. I have made many investing mistakes, but learned a solid set of investment principles in return. Below are my top 10 Investing Tips:

(1) Invest in companies you know
(2) Invest in companies that will grow in the market
(3) Invest in companies that can raise prices and people will still buy
(4) Don’t invest in popular stocks or fads, fads die hard. i.e. Croc’s, Heely’s
(5) Research companies news and financial statements before you invest
(6) Use logic when investing, leave emotion at the door
(7) Keep your portfolio of stocks focused, don’t invest in over 30 stocks
(8) Invest in a stock only if you would you buy the entire company
(9) Invest for the long-term, the tortoise won the race.
(10) Look for companies with worldwide brand presence i.e. Apple, RIM