One Stop Market

Market participants are like patients in a doctor’s office waiting for the lab results on whether or not the US Economy and the Stock Market is going to fall apart at the seams in the next couple months or years. The background gossip is that of course Congress is going to approve the $700 billion bailout and famous investor Buffet has already jumped head over heels into Goldmann Sachs under the absolute certainty of its near future approval. But the markets on the whole are not convinced and, as a result, are simply going on like normal reacting to daily economic data and earnings reports from companies like RIMM (Research In Motion) as if the whole market isn’t about to be swept off its feet.

Speaking of RIMM and being swept off your feet, this investor favorite dropped about 30 points or around 30% today because of earnings reports that were below economist estimates. Listen up for a lesson in investing: RIMM missed earnings estimates by 1 penny (86 cents actual vs. 87 cents estimate). The company is solid, the earnings are great, it’s been weathering the market turmoil without too much difficulty, it has a product that is at the top of its market — unmatched by even the iPhone and it drops almost 30% in one day from the 90’s to the upper 60’s.

This isn’t a New England weather forcast for late summer, this is a rock solid company that’s not going anywhere but up from it’s current price of 71 and change. Give it two weeks and it will be back in the 90’s again. Quarterly earnings release time is a great time to grow your portfolio because it is such a short-sighted time in the market. All anyone cares about is if a company hits or surpasses the estimate. Of course, with the economy the way it is most of the huge companies like RIMM are going to miss their estimates. Now, after everyone freaks out for a day or two you can choose to be the smart one and buy into a hugely deflated stock right before it regains most of its losses.

Don’t miss this one. Easy opportunities like this don’t come often.

Conservative advice: BUY (RIMM) at 72 and hold until it reaches the 90 (or hold indefinitely).

Aggressive advice: re-finance your house and empty your 401K to BUY as much (RIMM) as you possibly can.

We’ll see what happens.

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