Toyota Sports car

Recently, Toyota (The world largest Auto maker) has placed more emphasis in the sports car segment to further grab its markets share and to improve its image which was badly hurt during the massive recalls of 8million vehicles last year. Here's a video from Bloomberg.

Apple vs RIM

Company profiles

Apple Inc.
Apple Inc. designs, manufactures, and markets personal computers and related personal computing and mobile communication devices along with a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers. Its famous products are Ipod, Ipod Touch, Macbook, Iphone and Ipad.
Research in Motion (RIM)
Research In Motion Limited (RIM) designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. The Company provides platforms and solutions for access to email, phone, SMS messaging, Internet, and Intranet-based applications. Its famous products are Blackberry wireless handheld devices such as Blackberry Bold, Blackberry Curve and recently Blackberry Torch.

Stock Performance

Chart 1. This is the stock prices of Apple Inc. over a period of one year. Apple is trading almost at its all time high.

Chart 2. This is a stock price of RIM for a period of one year. RIM is trading at its 52 weeks lows.

Fundamentals

Apple is currently trading at 18.29 times P/E. which is significantly higher than RIM which is currently trading at 10.44 tims P/E. Both companies have good cashflows and debt management. The net profit margin both Apple and RIM are 20.72% (Q2, 2010) and 18.15%(Q2, 2010) respectively.

Question 1 : Why does RIM (Blackberry) underperforms?
The main reasons for such as huge discrepancy in the stock performance are mainly attributed to the wireless handheld devices and its Operating System (OS). RIM still held the biggest market share of smartphone with Blackberry OS, Android ranked second followed by Apple OS. However, with Blackberry's OS slow in catching up with the general market, it fails to attract non-corporate users while Android and Apple are happily swallowing users from any segment of the market enabling them to have such a tremendous growth. With Steve Jobs back in Apple, Apple has transformed itself into the most innovative technology company. While Michael Lazaridis from RIM who invented the Blackberry phones used to be praised for his understanding of corporate needs such as convenient wireless access to emails and messages and most importantly, confidentiality. That legacy would not hold long anymore,RIM is suffering pullbacks in countries like Saudi Arabia, U.A.E and India for its heavily encrypted data which could potentially be used as a source of communication for terrorist. RIM is still working out its deal with governments to solve those problems, but it would ultimately need to either let the government access their enterprise server or set up a data center in every country that requires access to its data. The question comes, even if you're not dealing with the terrorist, drugs or sex trafficking, would you want the government to have access to every single message or emails that you send?

Question 2 : Is this an opportunity or a trap?
For value investor, it is always an opportunity to invest in a company when it's stock prices is at a heavy discount such as RIM. Recently, RIM announced a share repurchase program, RIM is trying to convince the market that the company still have faith in its own product and future growth. The last time RIM made its stock repurchase in 2003, two years after that the stock went up an amazing >300%. Will the stock repeat that history this time?

Iphone 4 vs Blackberry Torch 9800

The Blackberry Torch 9800 by RIM

Iphone 4 by Apple Inc.

Apple Inc. has become the most innovative tech company in the world with dozens of its best selling products like Ipod, Ipod touch, Macbook, Iphone and Ipad. While Research in Motion (RIM) is the Canadian company the won the hearts of businessmen and corporate people with its famous Blackberry products.

Recently, both companies launched their latest products namely Iphone 4 (Apple) and Blackberry Torch (RIM). Here's a video comparing these two phones.




Which would you choose?

13 Bankers

13 Bankers describes the rise of concentrated financial power and the threat it poses to our economic well-being. Over the past three decades, a handful of banks became spectacularly large and profitable and used their power and prestige to reshape the political landscape. By the late 1990s, the conventional wisdom in Washington was that what was good for Wall Street was good for America. This ideology of finance produced the excessive risk-taking of the past decade, creating an enormous bubble and ultimately leading to a devastating financial crisis and recession.

More remarkable, the responses of both the Bush and Obama administrations to the crisis–bailing out the megabanks on generous terms, without securing any meaningful reform–demonstrate the lasting political power of Wall Street. The largest banks have become more powerful and more emphatically “too big to fail,” with no incentive to change their behavior in the future. This only sets the stage for another financial crisis, another government bailout, and another increase in our national debt.

The alternative is to confront the power of Wall Street head on, which means breaking up the big banks and imposing hard limits on bank size so they can’t reassemble themselves. The good news is that America has fought this battle before in different forms, from Thomas Jefferson’s (unsuccessful) campaign against the First Bank of the United States to the trust-busting of Teddy Roosevelt and the banking regulations of the 1930s enacted under Franklin Delano Roosevelt. 13 Bankers explains why we face this latest showdown with the financial sector, and what is at stake for America.

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