Analyzing the analysts

I see where the wizards at Canaccord Genuity made some headlines today with a bleak prognostication on the future of RIM/BlackBerry.

The future of Canaccord Genuity is actually far bleaker than that of RIM, but there is no way for the average reader to know that when they read the grim headlines at the Montreal Gazette or the 101 other portals the story found its way to.

Canaccord ranked 14th out of 15 surveyed investment advisers in the most recent JD Power Investor Satisfaction Survey. They've been losing money hand over fist. They've been very vocal about shorting  RIM for months. 

They'll be out of business long before the wizards from Waterloo.

Moment of truth for RIM

If this BB10 puppy is a dog RIM is worth somewhere around $8 or $10.

The stock has gone down the last couple of days because everybody who piled in on the speculation that BB 10 was going to be a home run has been cashing out.

As they should. It needs to be a home run to justify a share price in the 18-20  range. Mind you, some happy  sales numbers and positive reviews could easily push the stock to $40 in the near term.

The dilemma of RIM short sellers

If you follow Research In Motion you already know that the percentage of RIM stock held short has been wildly in motion. Depending on what you read, anywhere from 17% to 25% to one third of the RIM share float is tied up in short positions.

That's an awful lot of folks who will want to cover their asses as we get closer to the BB10 debut. As the linked article states, a lot of the current activity in the stock could well be from nervous shorts covering their positions.

As the share price approaches $20 it's got a lot of happy-ever-after built into it. Folks who were going short at ten bucks are screwed, but there is an argument to be made to short the stock in the twenty dollar range. BB 10 is obviously the make or break hinge here. If that debut meets a luke-warm reception then shorting in the next couple of weeks will pay off.

If the BB 10 buzz continues to build and is followed up by a reasonable product, then shorting now will cause you to lose your shorts.

Best strategy?  If you foolishly ignored my advice to buy at 6 and change, or even ten and change last May, and you are contemplating a short position at today's price, balance that off with call options that will limit your losses just in case.

There's a reasonable amount of speculative upside over the next couple of weeks, so if you've got the nerve, get in at 16 and get out at 18 or 20 in the next week or ten days.

The trouble with headlines

Take this one  for example; "1,600 businesses sign up for BB 10 training."

What the hell does that mean?

Does that mean "Toys 'r Us" or "Nails r us?"

Ford Motor Company or Rob Fords Used Car Emporium?

General Electric or Jerry's Electric?

General Motors or Bob's General Repairs?

They're all businesses...

From everything I've heard RIM just might have a gamechanger ready to unleash, but bullshit headlines like this don't help their case.

Millions of BlackBerry customers lose service; stock jumps 12%

You would think the news that millions of BlackBerry customers lost their service throughout Europe and Africa would hammer the company's share price.

You'd be wrong.

Not only Europe and Africa, but the entire Middle East as well. Even Dan Gertler must have lost service to the three BlackBerrys he normally carries around with him. (Gertler carries three BlackBerrys because he likes to compartmentalize his busy life. One is for investor relations; Marc Rich and the Glencore guys have that number, one for African Heads of State, and one for his family.)

Research In Motion, the BlackBerry parent company, saw their share price soar $1.50 on the day. That's a better than 12% bump.

Didn't I tell you months ago that this stock was a day-traders dream?

Hillbilly blogger scoops Goldman Sachs analysts by six months

Here's today's story. Goldman Sachs gnomes declare RIM a buy.

Here's what you read at The view from Falling Downs six months ago. Beer-swilling pot-head organic farmer declares RIM a buy.

Luckily I took my own advice and accumulated a healthy long position over the summer, way before those Goldman Sachs smarty-pants types even started reading my blog.

Is RIM toast?

The Scientific American seems to think so.

And today's gloomy news certainly seemed to bear that out.

And here's another factoid to hold at the back of your mind. There are 2.5 times as many RIM shares gone short today than a year ago, when the stock was trading in the neighborhood of $19. In other words, more than twice as many investors are betting against RIM at today's price than were betting against it when it was 19 bucks.

There's an obvious herd effect manifest in those numbers, and that herd effect is driven by exactly the kind of news stories linked above.

Here's what's real; much depends on BB10. If that flops out, you're looking at a stock that shouldn't be valued above its break-up value. That won't be determined until the last patent is auctioned off, but it's reasonable to say we're comfortably within that range at today's close.

Which is why it doesn't make a lot of sense to go short at this price.

The fact that less than 2% of new cellphones sold in the US in the last quarter were RIM phones is hardly news. It's a wonder they sold any, given the hype around the BB10 that's only two months away.

What happens after that will depend on the BB10.

In the meantime, two or five or even ten percent daily swings in the share price are going to be routine.

A day trader's dream!

RIM cracks $10 for first time since June

Boosted by a positive review from a NY analyst, RIM briefly broke the ten dollar mark today before falling back.

There's another two months and a bit to go before the make-or-break BB 10 roll-out. That's going to be a busy up-and-down time for the share price, but the overall trend is going to be up for at least the next two months.

That's going to be a profitable two months for the in-and-out day-trader crowd.

What happens after that depends entirely on what RIM can actually deliver with the BB 10.

RIM takes 4% jump day after being declared "dead in the water"

Pacific Crest Securities is the go-to shop for Silicon Valley start-ups looking to go public.

So when one of their junior analysts wrote a disparaging opinion about Research In Motion the other day it was big news.

James Faucette declared the new BB 10 OS "dead in the water."

That's not unexpected coming from a shop that has championed android app providers and Facebook and the Silicon Valley status quo.

James might be right.

But he might not be.

What I hear from BB insiders is that they love the BB 10, and pretty much all of them own at least one Apple or android platform.

And RIM isn't a Silicon Valley start-up.

Their break-up value is still at least 50% above their market cap.

I'm still seeing a buy here. Worst case scenario sees a straight line going forward.

If BB 10 gets traction, the sky is the limit.

What's news and what's not

There's been tons written all over everywhere about how "news" has become entertainment programming.

That's pretty much true.

The other morning the CBC started out their "World Report" with a story about what might be revealed at the Victoria Stafford murder trial that day.

Victoria was the kid who was murdered by a couple of loser crack-heads from Woodstock a couple of years ago. A sad sad story.

But is speculating about what might happen in court on any given day any kind of a "news" story? Should it lead a newscast that purports to be a serious news program of global reach?

No and no again.

It's the same pretty much everywhere you go for your news.

Many of the US sites are just full of speculation about John Edwards' mistress these days.

Edwards is an also-ran in the richest sense of the word. Also a major league slimer. But why does the fact that he dropped his trousers for gals other than his cancer stricken wife constitute news?

It doesn't.

What else is on the news radar?

RIM stocks falter. That's news?

Gingrich drops out of GOP race. That's news?

Bin Laden's diary is big news these days. Now that Obama has made the Osama kill a central plank in his re-election campaign we'll be hearing tons and tons of imaginary updates from bin Laden's diary.

Oh, and don't forget the Facebook IPO. A bunch of self-dealing self-interested insiders keep issuing press releases and the media pass this garbage on as though it's important news.

At last report Zuckerman values his lucky strike in the $100 billion range. Is that news?

Zuckerman's lucky strike can disappear as quickly as it appeared. One billion is too rich a valuation for Facebook, never mind a hundred.

But check your news sites.

All this stuff is considered news.