The idea that RIM can just stroll into the office several years late with BlackBerry 10 and pick up where it left off is absurd. You have a better chance getting an NHL season in
a new franchise in Waterloo than of having a successful enough launch to salvage things.
When RIMM stopped being an obvious short, it became nothing more than --
using Doug Kass's words
-- "a trading sardine."
If you caught the double on this thing, you weren't good or smart, you were lucky. You played with fire and you didn't get burned. Try doing that as a strategy -- buying dogs and calling them value plays -- and you'll lose your bum on some of the greatest sucker stocks of years' past.
The opposite of RIMM -- AMZN.
The market reacts however it reacts to an Amazon earnings report. Up initially. Down initially. It really doesn't matter. If you buy just a few shares of this stock, from time to time, on the dips, you -- at least historically -- have become wealthier for your troubles.
Why? Why does this happen to AMZN?
Because there's very little uncertainty. Yes. Very little uncertainty. The bears, who
do not have the guts to short AMZN
, make you think the sky is falling in Seattle. It's not, man.
I put that lame act to rest Thursday in
Absolutely Devastating News For Amazon?
When Amazon says we're going to lose money -- or some Wall Street analyst hack reduces Kindle Fire sales estimates -- investors do not worry. They support the stock at some relatively modest low. And then they bid it back up, irrespective of what that meaningless price-to-earnings ratio says.
If you have to ask what the P/E is before you buy a stock, you shouldn't be investing. That's right. Those days are long gone, particularly when it comes to names such as Amazon with class A management and a rapid cycle of reinvestment aimed at massive long-term opportunity. If you use the P/E for anything, consider it a gauge of investor confidence that management will execute, keep on delivering revenue and end up long-haul profitable.
It should come as no surprise that AMZN rises on "uncertainty" and RIMM tanks on false optimism. Even though they do not report back-to-back, the two companies provide an instructive comparison case for investors.
--Written by Rocco Pendola in Santa Monica, Calif.