What is Your Stock Worth?
There’s one secret that all Wall Street insiders know, yet never talk about.
I’m going to share it with you, but I want to tell you up front that it’s going to be hard to swallow for most of my readers.
The reason for that is due to the fact that it goes against all the conventional wisdom you read and hear about in the media regarding the stock market and price movements.
Ready? Here it goes: The stock market is there to serve you, not guide you.
Now take a few seconds to let that sink in.
The reason all investors need to understand this is because the stock market is not your friend. It doesn’t have a personal vendetta against you, and it doesn’t give a hoot if you’re a buyer or a seller.
I’ve seen so many investors in my career that think the stock market is out to get them!
Investing with this sentiment in mind will not only make you a more effective trader, but it will also undoubtedly help you take your portfolio to the next level.
What’s Your Stock Worth?
If the stock price of, let’s call it ABC company, closes at $45.50 today, does that mean it’s worth $45.50 per share?
Since the stock market is traded by emotional investors who bid up prices when they get excited and push them lower when they get depressed, the stock market doesn’t always accurately reflect the worth of the company.
Most of the time it does — but not ALL the time!
Let me give you a perfect example that my readers took advantage of recently...
Back in May, I told you about Western Digital (NASDAQ: WDC), the maker of data storage solutions, and how the stock market threw us a bone a few weeks earlier by offering it at an attractive price. I also reminded you how Western Digital’s stock price was not reflecting the underlying worth of the business.
Here's how that worked out for us...
The stock price was already up +36% since I recommended it in May!
Then in August, I mentioned again that the stock market was pricing the stock as if the company was about to fall into the abyss, and that we were staring at a very attractive entry point. That day, I told you, “The gap between the stock price and the worth of the business was so big, an 18-wheel freight truck could’ve driven through it and still had room to spare!”
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Even when the company reported impressive fourth-quarter results, the stock market pushed the stock price lower.
Apparently the panicky investment herd didn’t like what they heard about future earnings and sold the stock.
And they were dead wrong...
Since then, the stock jumped 32%!
For those investors that let the stock market guide them... well, they lost out on a great opportunity.
Those of you who took the advice to let the stock market serve you ended up pocketing some of the easiest gains in today’s market.
Your Next Move to Profit
Right now, I have my eye on another company that is in a perfect position to surge higher. There’s absolutely no question that the market is undervaluing this company — and for the life of me, I can’t figure out why.
But here’s the truth: I really don’t care.
And more importantly, neither should you!
Again, we don’t want the stock market to guide us; we want to be there to exploit it when it screws up.
Sounds too good to be true?
Well, just see for yourself right here.
All my best,
Charles cut his chops on the trading floor of the New York Futures Exchange before moving on to become a wildly successful money manager on Wall Street.
And with more than 35 years of recommending stocks under his belt, Charles has knocked the cover off the ball, compiling an amazing record of success and posting gain after gain for his loyal readers. He is the editor of Park Avenue Investment Club and the Insider Alert newsletters.
Charles is also the author of the highly acclaimed book, Getting Started in Value Investing.
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