Monday, April 16, 2007
No Log-Rolling Here
One of the dangers of writing as frankly as we do in these pages is the risk of annoying not only the Bob Nardellis and Pactrick Byrnes of the world, but also friends and acquaintances, not to mention those who speak well of this blog.
And that includes Barron’s, which carried a favorable mention of Not Making This Up in its Electronic Investor column a year or two back.
However, we’d be making it up if we didn’t highlight a howler simply because it came in Barron’s, rather than, say, this morning’s research emails.
And Alan Abelson’s “attaboy” note about Fred Hickey’s supposedly spectacularly great call on Research in Motion was nothing if not a howler.
The stock started off the week at 145 and change, got as high as $148.3l and closed the week at $132.74, taking almost a 12-point walloping on Thursday after the company reported operating results that failed to meet its fervent fans' great expectations, and also disclosed it was under SEC scrutiny for alleged stock-options tomfoolery.
Score one for our favorite tech man and Roundtable member, Fred Hickey, who has been unshakably bearish on Research in Motion.
Now, let’s look at Hickey’s "unshakably" negative case on the stock, made in an earlier Barron’s; January 2005, to be precise:
Hickey: Research in Motion makes BlackBerry hand-held devices. This momentum stock appears to be breaking down. Portfolio managers drove it up to 100 at year end, though it has come down to 74. People who work in financial services are the primary users of BlackBerries. Also, venture capitalists and Silicon Valley types. A lot of people are now addicted to what they call the CrackBerry, but there are cracks in the CrackBerry story.
The BlackBerry will end up competing with the whole cell-phone world. It sells for a few hundred dollars, but is now being discounted because of a possible glut. I see a recession, and this is a product companies may cut back on.
That “74” mentioned by Hickey was not a typo: RIMM’s share price at the time was indeed 74 bucks.
Now, we all make bad calls in this business.
But if you’re wondering what, precisely, is so spectacular about Hickey’s "unshakeably bearish" call on a stock that went from $74 to $148 and back to $133 that it deserves a column in Barron's…well, all I can say is, I am not making this up.
And I’m not log-rolling, either.
I Am Not Making This Up
© 2007 Jeff Matthews
The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Posted by Jeff Matthews at 8:26 AM