The best piece of investing advice I can offer to investors right now is to make a list of all the investment analysts you have heard over the past year who have claimed that RIM was a much better value than companies like Apple. Treat this as a type of watchlist to make sure you treat all their future recommendations with a great deal of scepticism if you choose to listen to them at all.
The warning signs on RIM have been flashing red for well over a year now, yet countless investment advisors who have no understanding of the high-tech industry have been convincing unwitting investors that RIM has become a great “value play”. Many investment analysts who focus too much on a company’s growth prospects and not enough on fundamental analysis have lead investors off a cliff on several occasions in the past decade or so. This has lead investors to think that the opposite approach of focusing entirely on fundamental analysis is therefore a much safer approach. The recent case of RIM shows in stark terms just how false this assumption can be, particularly in the case of former growth stocks.
RIM looks cheap and may look even cheaper going forward as it continues to lose ground to its competitors. The only way the RIM will ever by a truly good buy in the future is if it show some signs that it can win its battle against Apple and Android devices. When it comes to high tech, there are no medals for third place.