If you're attempting to beat the market, you can't become one with the market. The investing mob tends to buy high and sell low. This phenomenon of entering and exiting at exactly the wrong time is easily illustrated by the heavy volume associated with tops and bottoms.
Your best bet in avoiding emotional decisions is to have a plan in place before making a buy.
A written plan describes your entry and exit points to avoid the cost of knee-jerk reactions. You need two exit amounts, one for taking profits and one for stopping out in case moves the other way. Create your plan before you enter. That way your thoughts aren't clouded during the heat of the battle, or what's also known as the fog of war.
Another protection measure in front of earnings is to sell a call against some of your shares or buy a protective put. I prefer to sell calls because option premium is especially high before an earnings release. The premium received acts as a buffer if the shares fall and will often result in a profitable trade regardless of the results.
That said, Google (GOOG), Apple (AAPL) and Microsoft (MSFT) have reduced BlackBerry's handset market share below 4%. While it's true the ecosystem is all but dead, the market has fully discounted BlackBerry's handset death for some time.If the environment changes, shareholders stand to win; otherwise, anticipate Microsoft's recent and renewed vigor into the mobile space to make things more, not less challenging. It doesn't matter to me, and it shouldn't to you because enterprise solutions are profitable and BlackBerry maintains its solid leadership in that space. Beyond the current operational turnaround plan, the company has other options open and available. The company's war chest, stuffed with $2.7 billion, enables the company to make strategic purchases and have the wherewithal to avoid a scorched-earth attitude to keep the wheels from falling off. At $8, over half the value of a share is cash alone.
For a buy and hold investor willing to wait for a return to profitability, BlackBerry is one of the few technology giants that can reasonably double in the next 24 months. At the time of publication, Weinstein had no positions in securities mentioned. Follow @RobertWeinstein This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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