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Maikelmike
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Graduate of Stockholm University, Masters degree in Finance, Second degree bachelor in Economics, Focusing primary on writing analysts on Telecom companies but may also on occasions provide articles on the stock market as a whole.
  • Invest In What You Know 4 comments
    Jan 29, 2013 10:19 AM | about stocks: NOK

    One important part when analyzing stocks - that is often being overlooked - is the part comparing the particular company's product against its competitors. How does example the Lumia line stand against competitor products such as the Samsung Galaxy III or Iphone 5 ?. This concept is very important at least when we talk about a highly innovative dependent industry, such as the telecom.

    One of my all-time favorite stock pickers is the former Magellan Fund manager Peter Lynch. He popularized the concept of" investing in what you know". This concept implies that every investor - Professional or amateur - should place his money in industries or companies that he understands. Other famous investors' following this concept is Warren Buffet, who simply does not invest in tech-stocks because he does not understand them. This important but simply concept is however often overseen by most of investors. Most investors wants to make fast money and falls into the trap of investing in companies they do not understand, companies that are dubbed as the new rockets on the market or the new IBM´.

    Unfortunately, it seems that this concept is also being overseen by most so-called professional analysts.

    For not a long time ago, I was reading a sell recommendation on the Nokia stock. This recommendation contained as usually some quantitative arguments on hypothetical situations leading up to their sell recommendation. So far so good.

    However this recommendation also tried to back its recommendation by providing some negative comments about the hardware specs. of Lumia 920. It stated simply that the 920 was lacking behind its competitors in hardware specs. Worth noting is that this recommendation was coming from one of the biggest and well-known investment banks in the world. I stop to read it immediately.

    How long had this analyst been researching? I do not know.

    Did this analyst know Nokia? I do not think so.

    Had this analyst been investigating the competitors' products? I do not think so.

    Had this analyst been researching the industry he was supposed to analyze or the company he was recommending people to sell, he would have known that the Lumia 920 either possess better or on par hardware specifications as its competitors. However this analyst took the easy way, and overlook the important concept of research.

    --

    One other important concept is to look for how the products are received by the customers. I like to bump into the review charts on Amazon wireless from time to time;

    Nokia has 4 mobiles in the top 5, 7 in the top 10 and 9 in the top 20.

    (click to enlarge)

    Disclosure: I am long NOK.

    Themes: Nokia, Mobile, Stocks, Telecom Stocks: NOK
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Comments (4)
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  • Colaolli
    , contributor
    Comments (200) | Send Message
     
    You know I've been thinking about this a lot and I agree with you in everything. What pisses me most is the *FACT* that iPhone5 lags both Lumia 920 and Galaxy S3 in hardware and still it's praised by analysts.

     

    Many say that USA is a "sheep market" where people decide what they buy just by looking what others have bought. It looks like this applies to investors too...
    29 Jan 2013, 03:46 PM Reply Like
  • Maikelmike
    , contributor
    Comments (6) | Send Message
     
    Author’s reply » Unfortunately that's the case in Sweden too , however I've started to notice that Samsung lll is gaining momentum in mind share, while lumia still lags behind. Things however change very fast in the telecom industry looking just two years back Samsung where nowhere. I think that 2013 is going to be a very interesting year, we will see both new products coming from Nokia and Samsung building on these current flagship while also see if apple will deliver some innovation. 2013 is gonna be a very interesting year!
    29 Jan 2013, 05:03 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7877) | Send Message
     
    The Stockholm Pendeltåg and Copenhagen Öresundståg are my preferred research vehicles as well as the London tube. In just 30 minutes, walking down the isle, you can see consumers preferences mapped out for you over time, month after month.

     

    Analysts are trapped behind swanky desks and trapped in snazzy company cars. They don't much interact with the public.
    12 Feb 2013, 12:21 PM Reply Like
  • Maikelmike
    , contributor
    Comments (6) | Send Message
     
    Author’s reply » That's TRUE, the analyst works like a wizard but do not have any magic, his calculations are based on guesses of future events...peter lynch used to go into malls and look which boutiques had the most queues or customers coming out with bags...guesses are for people that do not know, analysis is for people who know, today analysts do not know.
    12 Feb 2013, 04:37 PM Reply Like
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