Financial Stuff

1. I am new to the sqidoo community and this is my first lens. Please bear with the form of this I'll do my best and I'll try to make sure the content at least makes up for the form.
2. I'm not giving financial advice only relaying the culmination of the infomation I see and my interpretation of it.
3. I will be happy to take a look at stocks about which you have questions. Please limit your requests to companies that are traded on either the Nasdaq, NYSE, or AMEX.
4. My assesments will not pull any punches. I will call them like I see them. If you don't want me to be honest...don't ask.
5. If you do want my assesment just ask. If the requests are not too overwhelming I will try to get to each.

There has been a theory that because there are so many investors in the world that the stock markets are efficient. All stocks are priced correctly. This just flat out isn't the case. The reason this is a flawed theory is because the decisions are made by humans. The problem is that as humans do many of the buying and selling decisions are based on emotion. The two most common are Fear and Greed. These emotions are magnified by the likes of CNBC and their search for ratings. I've always said the only way you'll get a guarantee in the financial world is to make decisions based on emtion....you'll be guaranteed to lose money.

You can make money if you go against the emotion. Because at some point peopl will come to their senses and the stocks will return to the higher or lower place they belong. The trick is to find good companies that are waaaaay underpriced because people are afraid that if they hold on to that stock they will lose (or lose more) money. That's when you buy them and when people see "Hey that's a goos stock." and the Greed emotion kicks in, you sell it and enjoy your profit.
You'll begin to better see how this theory works as we move on.

OK Just to get us started I thought I'd pick the first stock to look at. I chose Surewest Communications (ticker symbol SURW). I chose this stock because they hit a 52 week low today. The price today was $6.40 at close of market.

This happens to be a good stock. It is underpriced. I would but this stock between $6 and 6.30 it get that low and may even go lower. Once people realize this is a good company with good prospects and strong financial. I think it's actuall worth about $10-$12 per share.

Don't but this stock and hold it hoping for a $12 share price. If you wonder why this is read the theory post about Greed. If you let the emotion make your selling decision, you'll lose money.

I would suggest selling between $7 and $9 would represent between a 17% and a 50% return. I would call this not bad!

SURW - Buy @ $6.20/Share on 4/28 (the day after my post)
Sell @ $8.20/Share on 05/08.
This represents a 33% return in approximatly two weeks, not bad. If you could make 33% every two weeks that would be almost an 800% return over the course of a year. Nice.

Check back for another pick...or send me the name of a company and I'll give you my assesment.