Research In Motion - hope rally? Investment legend Ben Graham wrote: "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. The distinction sounds clear. Thorough analysis is often riddled with bad assumptions and greedy impulses. Consider Research In Motion. Its shares have rallied nearly 90 per cent to about $12, from their lows of just two months ago, as its next generation of phones approaches the market. RIM has set a January launch date and the phones are in final testing with wireless carriers. This has prompted several analyst upgrades. Carriers, the analysts point out, have an interest in eroding the near-duopoly in smartphone operating systems enjoyed by Android and Apple. Carrier enthusiasm will push phones on to store shelves, so RIM will enjoy some boost in sales in the quarter ending in March 2013 - whether consumers like the phones or not - as inventory fills the distribution channel. RIM shares could well keep rising. There are several months ahead that may be characterised by anticipation of non-terrible results in the March quarter, hope that the new phones will catch on, and a share price that remains very low relative to the company's historical earnings power. As Berenberg research points out, however, this sort of "hope rally" is a well-known phenomenon in consumer electronics, one that tends to end badly. One needs only look back as far as August 2011, when the launch of RIM's last generation of phones drove the stock from $22 to $32 (a bigger move, in dollar terms, than the recent surge). It was downhill from there. The arguments for owning RIM have little to do with sustained demand for the company's products. Speculators do not care either way. Investors must be more rigorous.