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Identifying Multibaggers
The Equity Desk Forum :Market Strategies :Identifying Multibaggers

Topic: Nokia 2012- A case in point

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subu76
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Posted: 03/May/2012 at 6:51pm

The title has been made up by Newspapers .

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samirarora
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Posted: 03/May/2012 at 7:54pm

but guys all said and done..

nokia is not an upstart. It is the largest company in Finland and one of Europe's largest companies.

Has been no.1 year after year for years...

If it starts supporting android, its handsets are as good as the best... not only lumia but the n8 and few more.

not counting smartphones, it is still the largest seller of phones and holds 10s of thousands of patents.

and now..just because it is sticking to its stand of staying away from the crowd and avoiding android and trying to develop a personality of its own, its facing some challenges but now it is forging long term relationships with the software gorilla called microsoft.

Microsoft is going all guns to develop software for phones and tabs...first match has been won by apple.. maybe microsoft comes up something interesting??

I mean, should a company like nokia be written off ...the falling knife argument is good...but whatever happened to buy when others are fearful and sell when others are greedy.. OR ...money is made in stocks if one buys the stock cheap...etc etc.

Question is not really about nokia..but a company like nokia hence, while we are working on nokia as an example...conversations could be generalized a bit more..

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subu76
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Posted: 03/May/2012 at 1:05am

Originally posted by samirarora

the falling knife argument is good...but whatever happened to buy when others are fearful and sell when others are greedy.. OR ...money is made in stocks if one buys the stock cheap...etc etc.

The falling knife statement is related to falling fortune (related to value)

Your cheap stock/be greedy when others are fearful are related to price.

let's not confuse the two

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samirarora
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Posted: 03/May/2012 at 9:28am

But price will only get cheap when something or the other is NOT going well...its because of the falling fortune that the price is low...if nokia was doing stupendously well, why would it price be divided by 4?

Tata chemicals was once rs.35...hll was 120 etc...etc etc etc....due to falling fortunes...

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subu76
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Posted: 04/May/2012 at 12:37pm

Lynch's point was don't catch a falling knife (a company where business is going downhill) . Wait for things to stabilize and then buy.

He mentions explicitly that this means you loose 2-3 bags but if the company was really in the dog house and has trully turned around then you can still make a lot of money.

Personally, i don't think it's a good idea to buy stocks just because it's price has fallen. An important additional criteria (on top of the stock price getting killed) is that business prospects should look sunny going forward. I don't think we can say that about Nokia

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FutureBull
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Posted: 04/May/2012 at 9:49am

recent events in the tech world suggest if you are out of innovation treadmill you are unlikely to be healthy in short,medium or long term. This is a time when companies fight through patents. It is very simple if patents and design innovations show falling trend for a tech company, you take the exit route forever. With all its might Microsoft,Oracle stocks have done nothing for the decade forget about struggling ones.

For a small investor like me, it is very difficult to know when Nokia type of company could turn around. May be, it could never come.

‘The market always does what it’s supposed to — BUT NEVER WHEN’.

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subu76
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Posted: 05/May/2012 at 3:02pm

if it were to turn around we'd all know based on peer feedback about their device

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FutureBull
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Posted: 05/May/2012 at 4:57pm

I think the battle is no more for devices. It is between ecosystems. Apple and Google have built ecosystems which can be defended. Nokia, standing alone can't defend itself and building ecosystem takes years. It also depends on how the base of a company was built. Google and Apple knew from the very beginning that they have to share the rewards of further innovation and hence concept of apps. Nokia, RIM and Microsoft can't copy it and claim success. IMHO it must be in your DNA. I am not that optimistic about RIM and Nokia. MS is paying developers to make apps for its ecosystem. RIM/Nokia would not survive in current form despite good hardwares/devices.

‘The market always does what it’s supposed to — BUT NEVER WHEN’.

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