Right when you think a stock like RIMM or NOK cannot go lower, it does. In both cases, investors -- for good reason -- have absolutely no confidence whatsoever in management. As TheStreet's Richard Saintvilus noted in Research in Motion Should Just Shut Up:
RIM is in no position to diagnose itself, regardless of what its CEO may want people to believe. Numbers don't lie. RIM has done a lot more talking and a lot less executing, and it is time to reverse them. It can start a recovery -- as faint as that may be -- by just shutting up.
It's only slightly different at Nokia, primarily because that company did several things RIM refused to do such as move faster to shake up management, abandon a dead-on-arrival operating system and forge a key strategic partnership. Now, here comes the hard part - executing.
That's what makes claims that any stock in a position similar to the pickles RIMM and NOK find themselves in could double so absurd. Like Saintvilus says, RIM needs to shut up first, come up with a viable plan and then implement it. Why should any investor give the company the benefit of the doubt in this respect?
If you enter a long position in RIMM or, in my case, NOK, approach it with a cautious and humble skepticism. Competitive headwinds and about 3.5 billion outstanding shares (at NOK) should make anybody cautious, humble and speculating in small doses. Don't enter these stocks even half-expecting a double. That's a great way to set yourself up to fail and mismanage a position.Another stock you've been told by any number of people will double in 2012 is Ford Motor (F). Go into this trade with more than "a cautious and humble skepticism," but with a time horizon measured by geological instruments.
Because Ford returned almost 1,000% between late 2008 and early 2011, the cats who argue it will "double in 2012" think it just has to happen again. And, heck, a mere double is only 1/10 of what the stock is capable of. As if, it's a professional athlete coming off of a fluke season. The 50% haircut F took over the last year-and-a-half - it wasn't a fluke. There might not be a more certain industry on the planet than the auto sector, especially if you're one of the major players trying to build business in Europe and China, while selling to a domestic customer too scared to spend and too poor to save. If I have to be in the space, give me shares of a luxury dealer who sells to people less concerned with price and the broad economy.
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