Common Mistake Costs Some RIM and Nokia Investors; Special Report by Leading Financial e-Letter Investment Contrarians

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In a recent Investment Contrarians article, editor Sasha Cekerevac argues that one of the common investor mistakes that occur quite often is trying to catch the bottom in a stock…or trying to catch a falling knife, as some might say. Cekerevac notes that investor mistakes occur when people believe a rebound might occur when there are significant hurdles for the companies to overcome.

Common Mistake Costs Some RIM and Nokia Investors; Special Report by Leading Financial e-Letter Investment Contrarians

Common Mistake Costs Some RIM and Nokia Investors; Special Report by Leading Financial e-Letter Investment Contrarians

“A great example of trying to predict a change to the market sentiment before the time is right and of investor mistakes along the way involves two cell phone makers, Research In Motion and Nokia,” comments Cekerevac.

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In a recent Investment Contrarians article, editor Sasha Cekerevac argues that one of the common investor mistakes that occur quite often is trying to catch the bottom in a stock…or trying to catch a falling knife, as some might say. Cekerevac notes that investor mistakes occur when people believe a rebound might occur when there are significant hurdles for the companies to overcome.

“A great example of trying to predict a change to the market sentiment before the time is right and of investor mistakes along the way involves two cell phone makers, Research In Motion and Nokia,” comments Cekerevac.

Nokia used to be the largest cell phone maker in the world, but has seen a massive fall from grace and is now incurring losses, Cekerevac reports: “With the cash pile being burned on an increasing basis, it appears that if things don’t change, the company could run out of cash by the end of 2013.”

According to the Investment Contrarians editor, many have made common investor mistakes like buying Nokia earlier in the year purely based on the dividend yield. However, he notes they would have lost a lot of money, as there has been a continued fall in the stock. In fact, Cekerevac observes, it’s now trading at just over $2.50, down from a 52-week high of $7.38; back in 2007, the stock was trading over $41.00.

Cekerevac points out a period during which Research In Motion (RIM) had over 40% market share of the smartphone market. He cites the latest numbers by International Data Corporation (IDC) have the “BlackBerry” maker at just over six percent of the smartphone market. Cekerevac claims he personally knows people who have bought RIM all the way down from $80.00 a share. The current price is just over $10.00 share.

Looking at both situations, the same scenario is seen, in which market share is declining, profitability is declining, gross margins are declining, and the products are not cutting-edge, but rather behind the curve, Cekerevac asserts.

“Investors start to ‘hope’ for an outcome, rather than look at the evidence in an objective light,” he concludes.

To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.

Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”

The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.

After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.

Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.

Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.

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