Friday, December 23, 2011

Buy!/Sell!: Uninformed Stock Picks


+ Um... Well... There's... No, wait. I know this one ... 


- Research In Motion. How's this for a losing strategy: Happen onto a temporary natural monopoly. Underinvest for a decade. Let Apple and Google (et al) blow you away in the market. Ignoring your lack of expertise or differentiating value, throw millions at trying to flank these titans. Discover you've created a product nobody wants and sell it at cost (less marketing). Justify this by saying you are going to sell your old products in emerging markets at a high margin. Discover emerging markets are even more sophisticated than mature markets in this industry, with Apple and Google (et al) already dominating.

They will get bought by Google or one of its suppliers for pennies. RIM's customers will be ported over to the buyer's platform and products. The end.

(note: this is not investment advice!)