As a reversalist, I like buying stocks that everybody hates. The more controversial, the better. If people hate a stock, then by definition there must be a lot of short sellers. And short covering is what makes stocks go up fast. Sometimes I’m the one doing the covering, which really sucks and I realize how fun it would be to be on the other side. I want to force other people to cover as much as possible.

Short sellers hardly ever short great businesses. That is why you can’t make quick money buying Berkshire Hathaway or Coca-Cola, but you can double your money in a month with SHLD (which is a bona fide piece of shit). We have to look for businesses of lower quality, but we can’t be buying absolute garbage, because the short sellers will win on liquidity or bankruptcy risk. We have to stay in the middle of the road.

RIMM is in the middle of the road. Everybody hates this company. It will take short sellers about 4 days to completely cover. I would never buy any RIMM products and I have no clue why anyone does. Their Playbook tablet is just as useful as a paperweight because the apps are terrible (unless you get Android apps). Every one of their phones (over two dozen SKUs) sucks! The software is suited to users from the early 2000s. Does anybody remember the last time RIMM came out with a product that actually took people’s share of mind? No. And yet, RIMM is in the middle of the road because it has no debt. It’s trading at tangible book value. The international business is actually growing because in poorer countries, consumers don’t get iPhones at prices subsidized by the carriers. There’s hope that by the end of the year, Blackberrys will run Android seamlessly. This could save the company.

So I expect shockingly terrible results to come out after the bell tomorrow. Hopefully there’s capitulation in the stock and further capitulation among the put sellers. As the put sellers cover, I will be interested to sell.

Let’s wait and see……………….