* Smartphone maker has fallen behind rivals
* Hurdles in the road, but a good buy at current levels-Watsa
* Fairfax CEO has correctly called market crashes
TORONTO, April 26 (Reuters) - Research in Motion Ltd may take four to five years to regain its stride after its recent stumbles, but the BlackBerry maker's stock is a good buy at current levels, value investor Prem Watsa said on Thursday.
"Is it going to turn around in three months, six months, nine months? No," said Watsa, chief executive of insurer Fairfax Financial Holdings Ltd. "But if you're looking four, five years ... We make investments over four or five years."
RIM's once high-flying shares have dropped 70 percent over the past 12 months as it has bled market share to smartphone rivals such as Apple Inc while demand for its Playbook tablet device has floundered.
RIM's shares were up nearly 4 percent Thursday afternoon at C$13.95 on the Toronto Stock Exchange.
Watsa joined RIM's board in January as part of a front-office shuffle in which Thorsten Heins replaced longtime co-CEOs Jim Balsillie and Mike Lazaridis.
Watsa, an investor whose approach is sometimes compared with Warren Buffett's, also boosted Fairfax's stake in RIM to 5.1 percent at the time, making it one of the company's largest shareholders.
Asked what he saw in the struggling company, Watsa pointed to his close friendship with Lazaridis, who remains on the company's board, and said he saw value in its shares.
"The stock price is down 90 percent. That overrides everything else," Watsa told reporters after Fairfax's annual general meeting in Toronto.
He suggested investors have overreacted to a company that has simply encountered some hurdles.
"People think that ... when things are going down it's over, and when things are going up, it will never stop. The reality is it's different," he said, noting the company's strong cash position and lack of long-term debt.
"It's Canada's success story. Business doesn't go right to the sky without any hurdles."
Watsa has built a reputation as a shrewd investor by correctly calling major market disruptions like the 2008 and 1987 stock market crashes, and making billions for Fairfax as a result.