The idea of obsession can work to the downside as well. Let’s examine the flip side of this equation with companies such as Research in Motion Ltd (NASDAQ:BBRY) (now called BlackBerry) and Nokia Corporation (NYSE:NOK). There was a time not long ago that Nokia held a commanding share of the cell phone handset market and RIMM (oops, sorry – BlackBerry) dominated the nascent smart phone market. But, consumer and investor sentiment changes rapidly in the world of consumer electronics. By the way, this highlights an important lesson from Warren Buffett – it’s usually best to avoid industries where things change rapidly – but I digress. The media’s obsession with both RIMM and NOK led to potentially oversold conditions on both names, presenting opportunities on the long side. Frankly, I’m not sure if RIMM can successfully retain the corporate user or if Nokia can gain traction in the smart phone category, but there is a compelling argument to be made for higher stock prices – at least for the short term. This hyper focus happens across all industries – does the name Herbalife Ltd. (NYSE:HLF) ring any bells?
A simple rule of thumb is if you’re interested in an investment (either long or short) wait until it disappears form the headlines. This leads us back to our original topic – the obsession with Apple Inc. (NASDAQ:AAPL). So when might I become interested in owning shares? When people stop obsessing about it.
The article The Obsession With Apple originally appeared on Fool.com and is written by William DeRosa.
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