Not a death spiral, but a spiral of life

I am always amused when I find myself changing my mind over a matter. Not so long ago, I found myself biddng farewell to a stock and declaring its nearing demise and then events came along, persuading me to take a different stand. Reading another economic declaration of Blackberry's (formerly research in motion, stock symbol BBRY) death after arrival with the lovely header "Has BlackBerry Re-Entered Its Death Spiral?"  I found myself objecting. Then words formed around this objection... 

Too many investors make judgements based on one quarter. But wise investment cannot be done in such a short term perspective. The global mobile market is huge, and its potential is the real target of the largest players. How many players are too much ?

Consider that, I believe that as long as Blackberry is profitable, and has a niche in the market, death talks are baseless. And as the past year as taught us - even at a low market price (lowest closing price for BBRY was 6.41$ on 24/09/2012) Blackberry was not seen as proper hostile take-over material. Which means that the company is here to stay.

Does it mean that it will ever reach its past dominance ? probably not.

Anyone imagining such a revival to glory was neglecting the changes from that past, mainly expressed by the presence of other prominent players. A once-apple dominated market is now android-dominated.

what used to be apple vs. the world, is now a seesaw of apple vs. samsung, and it has been going since late 2010.

Anyone viewing this with time perspective can only realize that in time, another player will replace either Apple or Samsung, and will lead, but with even less dominance. It has happened in any other market, and it will come to it in the smartphone market as well, as it is slowly becoming a fully competitive market with many vendors taking part.

With this perspective in mind, it is clear that Blackberry is already saved. It is live and kicking, and will be around for the coming years.

Does this make BBRY a worthwhile investment ? once the death option is taken off the table, i believe it is easier to see the strengths and weaknesses of this stock. Among smartphone vendors, it is most probably the one least valued by the market, and as such a real bargain. But as hightech stocks have this weirdness of not being properly valued by the market for prolonged periods of time (check the history of AAPL, INTC, AMZN or MSFT if you disagree) adding this stock to your portfolio necessitates higher consideration of the psychology of your brethren. In this final test, the better investors are the ones with this unique ability to sense the market, leaving the others to toy with seemingly scientific arguments regarding a stock.

So what does the psychology of the market tell us about investing in BBRY ? Currently, it is clear that Mr. market is melancholic about BBRY. How will he feel about her when time proves that the euligies were premature ? I for one believe he will be rather enthusiastic.

Am I right ? I've been wrong in the past regading this stock. As always, only time will tell, and only time will provide excuses and reasons for changes in one's opinions... 


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