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Nokia Corporation Message Board

  • groovenirvana groovenirvana Jan 29, 2013 12:14 PM Flag

    The Level of Denial Here Is Beyond Belief

    I've said it before. I'll say it again. I'm not short. Never was. I was actually long Nokia until the CC. Once I heard the CC, Elop's unenthusiastic presentation, the cut dividend, and the lack of actual guidance on any numbers for Q1 I exited the position. If you parse the numbers of that earnings report and listen to the CC, there is an overwhelming lack of clarity - from the financial operations to the forward guidance. In short, it's a junk stock - high risk, high reward. I'm sure everyone here knows what they're doing and can handle the consequences. I know you won't cry (well, not all of you) if you lose money.

    I myself moved on to AAPL. In less than 2 days, I'm already up 5%. I got a bit lucky to buy near the lows yesterday. It feels great to be part of a stock that really is a success story. Yet it's bittersweet to want my position to go lower, but I wouldn't mind. At these levels, AAPL is an absolute bargain. If you think about it, AAPL is almost 100 times more expensive than Nokia. However, it has a much better chance of providing outsized returns over 10 years than NOK. A lot of people here are blinded by Nokia's low price, without considering that there is a good reason why it would be priced so low to begin with. AAPL is a investment that lets you sleep at night. I absolutely could not sleep well holding Nokia. From tax evasion to some outside problem with downgrades or supply issues, there is just too much risk in holding it.

    A lot of unrealistic expectations here. This stock has no chance of doubling in the next twelve months unless it produces incredible earnings. There is absolutely no direct evidence that it will happen. Forgive me, but Nokiapoweruser is not a reliable source of information. Can anyone here provide any solid definitive proof that the Lumia 920 is selling like gangbusters anywhere? What of the China story? Surely someone would have already done channel checks or some kind of research to indicate what is happening on the streets out there. Outside of best seller lists on Amazon (wholly unrealiable) and a lot of hope, there isn't any solid data. I know Elop gave none in the CC outside of that incredibly half-hearted statement that demand was exceeding supply. Symbian is dying down and Asha is a feature phone that because of it's low price may grow, but could just as easily be replaced by Androids or iPhones in the future. The future is riding on Lumia and there is no solid data to show that future is bright. Certainly not Elop's -2% margin guidance for Smart Devices in Q2.

    A lot of ridiculous comments on these boards. Yet the most ridiculous comments surely come from those that are fantasizing that AAPL and Nokia are on any kind of level playing field. In truth, there is no playing field because Nokia is just isn't in the same league. All of the metrics - from cash on hand, to P/E, to operating margins, to sales and growth, and even a stable dividend (which Nokia just eliminated) - show that one is long-term giant with a short term price retracing and the other is risky stock that may or may not see the other side of $5. Putting them in the same sentence shows how unhinged from reality a lot of longs here are.

    I read someone here the other day say that they thought Samsung would lead in phone sales in 2013 with Nokia in second and AAPL in third. What a complete fantasy! Before Nokia takes out AAPL at number 2 it has to go by Huawei, HTC, and RIMM. That's right. Nokia is sixth in phone sales. Look it up. It's a fact. People here act as if Nokia is still the same company it was 5 years ago when it's clearly not. Trying to compare it to AAPL shows how clueless some people here are with how they are gambling their money.

    I suppose the overall point here is to provide some insight in how many Nokia longs (not all, as some know they are taking a serious risk with their money) are completely unrealistic about the prospects for this stock. Nokia goes up a nickel and they are dancing in the streets talking about eat short traders for lunch, and then if it goes down they talk about a conspiracy by the MM's to keep Nokia down.

    Why can't people here just face it? This stock is NOT currently worth more than $4-5 dollars a share because it just isn't. This isn't AAPL with a current P/E of 10 and huge cash flows. This is a troubled stock with an uncertain future. It is properly valued (even overvalued, one could say) as it is right now. In fact, even the slightest bad news would crush it. For example, any day now AAPL could come out with a cheap iPhone for China and a deal with China Mobile. What would happen to Nokia then? There are tremendous risks in investing in a company with large cash burn, consistently lower revenues, and negative or nonexistent margins.

    Too many people act as if Nokia is a sure thing. It absoulely is not. Why can't people here accept that maybe, just maybe, a large number of consumers are not interested in the Lumia or Windows 8? Maybe people don't like it. Maybe that's why it hasn't sold as well you would have hoped. The world doesn't have to love Nokia just because you do. And I even question how many of you love Nokia that much. I would imagine many of you don't even have a Nokia phone though you sing its praises constantly. I know because I didn't have one when I was long and I spoke glowingly about a phone I have never even seen or used. It's investor bias. Once you take a position, it's hard to remain objective. The Lumia 920 may be a nice phone, but it's not changing the world the way the iPhone did. And it's certainly not good enough that someone will choose it over a Samsung or an AAPL if their are equally priced. Sorry. That's just a fact. AAPL and Samsung control 92% of the market. There's a reason for that.

    You can bash me, call me a short, call me uninformed, and hate me all you want. But it won't change the facts. The fact is that by any measure an investment in AAPL at this level has a much better chance of going up in value 3 or 4 fold than Nokia does. It's an investment that will let you sleep at night. Nokia will keep you awake with that uncertain feeling that maybe you'll lose all your money one day soon.

    Good luck to all. If you succeed then you hit the lottery. But do be aware that there is a severe risk that this investment will not provide you with that golden pot at the end of the rainbow. Sadly, junk stocks don't work that way. If Nokia succeeds it will be a miracle.

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    • This post was the absolute truth. As tough as things are for AAPL right now, it's generating billions in cash, has a dividend, and 150 billion dollars to work with. Nokia is a junk stock facing BK at some point in the next few years. From a value investing standpoint, AAPL is the clear winner. So glad I got out of NOK.

    • so your only down $30 with aapl now?

      • 1 Reply to a327zig
      • I wrote that ages ago. Someone else moved it back up to make it current. I checked my mail and found your response.

        To answer your question...

        My position in AAPL after adding to my position slowly is about $ 20 down (5%). This does not take into account the hundred or so I made from the dividend. I will obviously be collecting another dividend in several weeks. These dividends will be reinvested through DRIP.

        If I had stayed long in Nokia from where I sold it at $ 4.25, I would be down 20%. I would be collecting no dividend and banking on a troubled company. IIn short, my AAPL position has been both less volatile and at least somewhat profitable due to the dividends. Plus I have the confidence of knowing that dividend can increase or shares can be bought back because AAPL has the money to do so.

        The results so far of my move into AAPL has proven logical and effective. I'm not stuck holding onto a risky junk stock that has no dividend and potential long term funding problems. AAPL may still face trouble in the future but it is at least more in control of its destiny than Nokia.

        Curious to see how earnings turn out for both companies. We'll know soon enough. Good luck to all of you in your investment.

    • Please stay and worship your apple. You are an apple lover. Nokia has made a turnaround and will get a miracle plus it is growing all the time as sales are being made daily in every part of their business. As nokia is a diversified corporation. For now small investors like me can afford to buy nokia. We love nokia and have big hopes and dreams for it's success.

      Sentiment: Buy

    • If you moved over to Apple, then what is your point? Are you trying to write a confession?

    • Well said and necessary IMHO..

    • dorianpc@ymail.com dorianpc Jan 31, 2013 10:14 AM Flag

      Level of denial accusation is not true.

    • The truth. Word is born. Bring it back...

      • 1 Reply to groovenirvana
      • Apple vs. Nokia as an investment is Apples to Oranges. A better comparison would have been Nokia vs. RIMM (BlackBerry). There is room in ones' portfolio for both Apple and Nokia. One is a solid, highly profitable Company with a history of innovative products, the other is a speculative, innovative Company that is executing a turnaround plan that is showing progress.

        You wrongly compare Apple to Nokia as an investment. Perhaps it should be Microsoft, Samsung or Google vs. Apple? Your post was overly long for a wrong investment thesis.

    • For the sake of posterity...

    • Well, I basically agree, though my price target is (and has been) $6 to $7 within the next two years and I will stick to that. What I find encouraging in a perverse kind of way is that that responses to the writer are not 50:50 (they are about 1/3 positive, 2/3 "go away"). Three months ago, they would have been 1% "good job" and 99% "what an idiot." Reality is indeed perception, and people are beginning (apparently) to catch on, there are potholes in the road and they have to be negotiated. Along the same lines, there has not been a mention of "$16 a share S-O-O-N," not a whisper, and I few that favorably, more realism is always appreciated.

      For the record I own the stock and will continue to hold, though I did trim some (but as always given the recent events, not enough apparently)

      Sentiment: Hold

    • dorianpc@ymail.com dorianpc Jan 30, 2013 10:39 AM Flag

      You propose that apple will hit 1350 before nokia goes to 12.50.
      HERE'S YOUR SIGN...

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