Research in Motion – RIM – Why I Bought It

by JDH on March 30, 2011

For the first time in my fifteen plus years of marriage, Mrs. JDH had a stock recommendation for me. She said to buy RIM.TO – Research in Motion Ltd. So, I bought RIM.

Mrs. JDH is a very smart woman. She is highly educated, and has held senior management positions at a number of large, well known Canadian companies. She married me, so we know she is brilliant.

So, when I asked her why, after all these years, she is now giving me stock tips, she said simply “it’s gone down a lot, so it will probably bounce back.” That’s good enough for me, so Research in Motion is now in our portfolio.

You will all recall that on March 14, 2011 I encountered a similar situation with uranium stocks. After the tragic events in Japan, I offered the opinion that the stocks had fallen too much, and were due for a comeback, as I described in Cameco: Why I Started Buying Uranium Stocks Today. As of today I have been proved completely wrong. While CCO.TO – Cameco Corp. did have a bounce for a few days after the initial crash, it has trended lower since, and there is no sign of a recovery in site. I was wrong, or at least early.

The story on Research in Motion is the same. They reported good results buy offered lowered future guidance, and the stock tanked. Is the correction over done? My wife thinks so.

She is of the view that the new RIM Playbook will be great, and it will make lots of money, and the stock will recover. We shall see. I suspect that her opinion is influenced in part by the fact that she is not a big fan of AAPL – Apple, and would love to see some competition for the iPad. She owns and uses both the iPad and the Blackberry Torch, so she is familiar with both technologies, and obviously she is hoping that Blackberry wins the battle.

“Hoping” is probably not a good investment strategy, but I’ve learned to never bet against Mrs. JDH, so time will tell if she’s correct.

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