Day: November 5, 2012

 

 

 

 

 

 

Since its peak in 2008, the share price of RIM(Research in Motion) has tumbled down to 5% of its original value. Many analyst concur on the fact that the reason RIM’s stock price diminished so dramatically reflected its inability to adapt quickly to the rapidly-changing smart phone market, which in current days, is dominated by Google & Apple Software. Its share in the mobile phone industry has also declined; as Alexei notes it, “Research In Motion Ltd.’s BlackBerry operating system had 7.7 per cent share in the third quarter, compared with 9.5 per cent a year earlier.” This percentages could be directly contrasted with Android’s share of the market, which rose “from 57.5 per cent in the year-ago period” to 75% current and Apple’s share of the market, which “increased to 14.9 per cent during the third quarter, from 13.8 per cent a year earlier.” Nevertheless, the time has finally arrived for RIM to regain its position in the market as major competitor as they recently announced having “entered lab testing with 50 wireless carriers around the world” for the 2013 launch of BlackBerry 10.

 

 

 

 

 

 

 

 

 

 

 

This news had gained many optimistic reviews by the analyst and onto RIM’s shareholders, as depicted by a “The stock [price] ending the day at $8.68 in Toronto, up 80 cents – its highest closing level in more than four months.” The announcement significantly decreased the level of anxiety of BlackBerry users who remained pessimistic for several months due to the consistent delay. As Richard Tse denotes, “they have a shot – something I couldn’t have said six months ago.” Many positive outlook on RIM’s future may serve to gradually increase the company’s share prices until the first quarter of 2013, when BlackBerry 10 is released; consequently, it would be interesting to follow RIM’s business progress for the next several months

https://www.youtube.com/watch?v=mmND2-fkUD0&feature=plcp

Source Cited

Marlow, Iain. “The Globe and Mail.” The Globe and Mail. N.p., 1 Nov. 2012. Web. 05 Nov. 2012. <http://www.theglobeandmail.com/globe-investor/rim-shares-rise-as-new-phones-enter-testing/article4843753/>.

ORESKOVIC, ALEXEI. “The Globe and Mail.” The Globe and Mail. N.p., 2 Nov. 2012. Web. 05 Nov. 2012. <http://www.theglobeandmail.com/report-on-business/international-business/us-business/googles-android-software-in-3-out-of-4-smartphones/article4892360/>.

Photo Credit

“RIM의 끝없는 추락.” ë‰´ìŠ¤. N.p., 29 June 2012. Web. 05 Nov. 2012. <http://dizin.co.kr/201248>.

Video Credit

Blackberry. “Official BlackBerry Channel.” YouTube. YouTube, 25 Sept. 2012. Web. 05 Nov. 2012. <https://www.youtube.com/user/blackberry?v=mmND2-fkUD0>.

With the current presidential poll standing at 49% for Obama and 48% for Mitt Romney, No one can determine with exact prediction who will be the president of United States for 2013 to 2017 period; however general consensus is leaning more towards Obama’s victory. In order to hypothesize how S&P 500 will be affected for the upcoming year, it is important to realize the difference of policies enforced by each candidates.

 

 

 

 

 

 

 

 

Obama’s Policies (Shaped by 2008 Financial Crisis)
1. Monetary policy over fiscal policy(printing out more money) → Inflation → Consumer
purchasing power down → less investment on S&P 500 → Stock price decline
2. Energy + info-tech support: As can be seen from the pie diagram below, Energy and info-tech
sector take approximately 31.8% of S&P 500 index. These two sectors are likely going to benefit
from Obama’s victory, as they have done in the past 4 years.
3.Tax cut to middle-income family & stricter regulation towards high-income families
4. Proposes new tax credit for Small Business(cap at $500,000) → negative impact for S&P 500
which is composed of big-marketcap companies:
“a company would get credit against income taxes worth up to 10 percent of the increase in
total wages in 2012, which could come either in the form of salaries for new hires or raises. A
company that increased its payroll by $4 million would see a $400,000 income tax credit.”
5. Info tech and Telecom stocks lead the market if Obama wins.

 

 

 

 

 

Mitt Romney Policies
1. Increase government spending on National Defense/utility related stocks
2. Not reappoint Bernanke when his term ends in 2014. Bernanke, the head of Federal Reserve,
contributed to a major increase (73.2%) in S&P 500 index since Obama’s inauguration in 2009.
Replacing him would have a significant impact on the index.
3. Support Consumer Staples, Financials, and Health-care based companies that lie on S&P
500 index.
4. Create more JOBS ← to do this support Big companies that mainly occupies S&P 500, by
reducing corporate income tax down to 25%

 Sources Sited
Durden, Tyler. “If Obama Wins, Buy IT, Telecom, Sell Materials, Healthcare; If Romey: Buy Staples, Healthcare, Fins, Sell Materials.” ZeroHedge. N.p., 27 Oct. 2012. Web. 05 Nov. 2012. <http://www.zerohedge.com/news/2012-10-27/if-obama-wins-buy-it-telecom-sell-materials-healthcare-if-romey-buy-staples-healthca>.

Picture Credit

“Why Black People Should (or Should Not) Vote for Obama In 2012.” Breaking News for Black America. NewsOne Staff, 13 Mar. 2012. Web. 05 Nov. 2012. <http://newsone.com/1935105/why-black-people-should-or-should-not-vote-for-obama-in-2012/>.

Mcadams, David. “The Oligarch Kings.” The Oligarch Kings. N.p., 18 July 2010. Web. 05 Nov. 2012. <http://theoligarchkings.wordpress.com/2010/07/18/mitt-romney-for-2012/>.