I continue to believe that to best profit from investing, you must embrace the irrational behavior of all forces influencing the market. I spoke about this before when oil prices were at $125 per barrel this summer and surmised that prices had to come down because of the stupid headlines and frankly things just not making sense.

I believe that on the night of Thursday, October 9 and the morning of Friday, October 10, stupidity and lunacy were out in full force.

The stock market is simply a perfect expression of all of the buying/selling activity of all of the people in the world. To take a line from the movie Men In Black, "A person is smart. People are dumb, panicky dangerous animals and you know it."

So, while the stock market ..e.g., price per share) may be perfect, it is also, well, dumb, panicky, and dangerous – that is, irrational.

Seacoast Banking Corporation of Florida (NASDAQ: SBCF) reported earnings for the 2^nd quarter ended June 30, 2008 after the bell on Thursday, July 24, 2008. The results were, well, horrible.

Estimates called for SBCF to earn at least $0.06 per share. Instead, the community bank that serves the South Florida market posted a loss of $21.3M or $1.12 per share. SBCF also indicated it would be declaring a “de minimis” dividend, and although the amount is not indicated, it might as well be zero. Furthermore, the healthy 7%+ yield many SBCF holders have been expecting at these levels has been negated for the foreseeable future.

On Wednesday, July 16, 2008 before the market opened, Wells Fargo (NYSE: WFC) announced financial results that helped propel some huge stock market gains over the next two days. Also fueling the rally was JP Morgan Chase (NYSE: JPM) beating expectations and seeing oil decline by more than $15 from its recent highs. Wells Fargo did report weaker financial results compared to the prior year, but surprised the Street by not only beating expectations but also raising their dividend by 10%. The market reacted positively and WFC has since rallied 30% since hitting its 52-week low on Tuesday.

WFC has experienced write-downs, but has remained relatively healthy from a financial standpoint when compared to its peers. That is, WFC has remained solved, and even with lower earnings and a higher dividend when compared to last year, their payout ratio is well less than 100%, unlike some of their peers, such as Bank of America (NYSE: BAC).

Neenah Enterprises (NENA.OB) is over 125 years old, yet they made their debut as a public company a little less than a year ago. You would think that one of the largest foundry companies in the United States would be due for a mind-boggling IPO on a major venue such as the NYSE or perhaps NASDAQ. However, when NENA began trading, it opted to be quoted on the Bulletin Board, which many just write off as a haven of, well, companies not worth investing in. Of course, there are many exceptional companies that list on the OTCBB, but that's a different story.

Perhaps NENA just wants to be public, but with that being said, they are not doing a good job of telling anyone they are. Yes, they file their quarterly reports. OTCBB companies are required to be SEC fully-reporting companies. However, a review of the NENA web site shows an investor relations section with no mention of a stock symbol, quote, or management profiles. This is a huge difference from the glorious investor relations sections of companies on the major exchanges. Compared to most OTCBB company web sites where they spend more time trying to sell their stock rather than the product itself, NENA's investor relations web site is non-existent.

When looking at a stock, it can be awfully tempting to blindly look at the dividend yield as support for it being a good investment. After all, if you can be earning 5%,7%, or even 10% on your money from dividends, that sure beats a savings account. After all, the money is in the bag, right?

In particular, I have closely been following the action of these three companies that are currently sporting yields well above their 5-year trailing average and are paying out more than 100%.

These are the types of things you write and feel stupid about a year later, but I am going to go on the record and say it. Oil is at $125 per barrel and has been as high as $135. Even worse, talk has abounded about it heading to $200 in the next year. Anything is possible and ultimately, yes, oil will get to $200 per barrel. However, before it starts the upward climb to that level, the price of oil is going to level out around $80-$90 per barrel and stay there for a while. As for $200, again, it will happen, but maybe in 5-7 years – and definitely not in the next couple of months.

I am not a commodity trader. I am not very knowledgeable about oil marketplace dynamics. I do not own any oil stocks. And I have no political agenda to force these prices down. Certainly, if we do something bonehead like go to war with Iran, which could happen, just throw this article away. But, all things normal, oil is due for a big correction and to cease its gigantic upward swing that has occurred over the past 10 years.

First, I will not lie. I have enjoyed and benefited from the recent Jim Cramer obsession with Broadwind Energy, Inc. (OTCBB: BWEN.OB).

I have owned shares for sometime – actually, before it was BWEN and was called Tower Tech Holdings and traded under the symbol TWRT. About 2 years ago, I found a company that was in the wind energy business and getting some support from a very reputable hedge fund manager, Jeffrey Gendell. I figured it was worth picking up some shares at $2-$4 per share. I even wrote about TWRT (now BWEN) in my column at AskMen.com about Green Investments back in the Summer, 2007 where I mentioned TWRT as one of the little, speculative plays with some upside potential. Since then, I sold a fair amount of my shares in the $10-$12 range, some at $25, and kept a small position to let ride. Certainly, my only regret at this stage is that I did not go 'all in' on this one, but the stock market is about investing and not gambling.

After a big run up, it is not uncommon for a stock to surrender some of its gains. However, to surrender all of the gains racked up in the past 17 years is a little more dramatic. This has been the story of National City Corporation (NYSE: NCC). The 163 year old bank that employs 32,000 is the latest of big name victims in the well publicized financial/credit/subprime mortgage crisis.

While the financial community is digesting the future of NCC, the stock is trading around prices it has not seen since the early 1990s. A 50% reduction in the company’s dividend rate back to 1997 levels was not enough to preserve NCC’s market value and now outside financing is required to keep things going.

Farmers & Merchants Bank of Long Beach (FMBL.OB) just experienced an unprecedented one-day decline in its stock price. In about one hour of trading, the stock fell 30% and touched $4,200 down from $6,050 earlier that day. Just a couple of weeks ago, FMBL was sitting pretty around $6,700. It has a 52-week high of $6,950 set in June of 2007.

Recently, Google (NASDAQ: GOOG) has seen analysts put price targets as high as $1,000+ per share. For the investors that watched Google clamor up from $100 to $700 and then jumped in, you are likely feeling the pain. Google is off nearly 40% from its all-time highs and while everyone is simply blaming the poor performance of the stock market, there are some very specific reasons why Google's upward trend has not continued.

1. Bidding Restrictions

Yesterday morning, Seacoast Banking Corporation of Florida (NASDAQ: SBCF) declared its 1Q 2008 dividend of $0.16 per share, indicating a forward annual dividend of $0.64 per share. I must admit, I am somewhat surprised by the decision of the board of directors to keep the dividend intact in this challenging economic environment. I have adamantly believed that before SBCF could come out of the gutter, they would have to cut their dividend just as their peers have. However, after reviewing the factors, it seems that at least 80%, if not 100%, of the SBCF dividend of $0.64 is safe for 2008.

Once again, rumors of a ValueClick, Inc. (NASDAQ: VCLK) takeover are circling through the marketplace. Recent Yahoo! (YHOO) / Microsoft (MSFT) talks made sure of that. VCLK even got a nice one-day uptick on the news, but yet again, the stock price has retreated to its recent $20-$21 area.

I know the world is talking about how VCLK is going to get snatched up at any moment. Perhaps even Microsoft out of desperation might be interested in stroking a big check? Google (GOOG), AOL (TWX), etc. – the list of prospective suitors goes on and on. I have even heard price targets from reputable sources in the $40-$60 range.

My great-grandfather worked for AT&T (T) nearly 100 years ago. I honestly do not know the exact details of his job (I have heard he was a janitor, though I am not sure). However, what I do know is that during his tenure, he made it a point to stuff as much AT&T stock under his mattress as he was allowed to. I suspect my recently deceased great aunt, who spent a nearly her entire career working for the phone company, did the same.

I have no clue how much that stock is worth today – and I have no idea how much of it still remains in family hands (I know some does). Specifically, I have no clue why my relative made it a point to acquire as many shares as possible. However, after reading yesterday's announcement, what I do know is that it imay be a good time to follow in the footsteps of my great-grandfather and make it a point to start socking away some more shares of AT&T.

I know it is a little early in the game, but it's time to get the portfolio ready for 2008. The time to prepare your strategy for the coming year is now. Companies that will likely experience the tax-loss selling in December are good candidates for a bounce in January. It's better to be in a little sooner than later, though it's never a good idea to try to time the market.

This is where I am putting my money the next 12 months. I think 2008 will be a tough year, though not necessarily a bad one. We are likely not to see the number of super high fliers that we had in 2007. Fortunately, the recent market cooling has over-punished a handful of companies and some valuations appear to be very attractive. On top of these stocks, you may also want to consider taking some of your U.S. Dollars and buying Euros or British Pounds. The lagging days of the U.S. Dollar are not over – just wait until they take oil off of this standard. It may not happen in 2008, but it's more likely to happen in the next 5 years than 50.

On Wednesday, September 5, 2007, before the opening bell, Sycamore Networks (NASDAQ: SCMR) reported their financial results for the 4th Quarter and Fiscal Year Ended 2007 financial results. The markets were not pleased with the results and it sent SCMR down nearly 8% to close at $3.73. SCMR also missed analyst expectations. The markets were expecting $0.03 EPS for Q4 2007 and $46M in revenue for the same period. SCMR came in at $0.02 EPS and $38M of revenue, respectively. To seemingly make matters worse, SCMR's Vice President of Finance and Administration stepped down. Sounds like things are falling apart at the Chelmsford, MA based manufacturer of networking hardware and equipment.

Certainly, it could be the case and SCMR could be falling apart and is dead in the water, but I want to point out some observations which suggest to me, that at the very least, SCMR is not going away.

First, let me say that I like RealNetworks, Inc. (NASDAQ: RNWK). I think it is a safe investment – and I think at its recent closing price of $6.23, it has some upside. I feel $9-$11 is a realistic price target for this one, though it may not happen. I must admit, that I am a buyer of RNWK at these levels and have been slowly nibbling away at this one. It just looks to be a very safe play with some things coming together that can result in upside.

As for the merits of RNWK, those are no secret:

I will be the first to say that I am not a heavily trained economist and I have no advanced degrees in the subject. Furthermore, I must admit that I do not have access to a fraction of the information that these people do - and in the event that I did, I would be hard pressed to make any sense of it.

First, SEB traded down 2.95% today to close at $1,990 – it touched as low as $1,901.10 during today’s session. SEB is now down nearly 30% from its 52-week high set on April 19, 2007. Despite continuing to be profitable and being one of the more established and reputable marine shipping and cargo companies in the world, SEB has failed to keep pace with the market’s rally.

Furthermore, it has failed to keep pace with the other pure-play bulk shippers. The lack of participation in the overall market and bulk-shipper rally can perhaps be explained by (1) SEB tending to march to its own beat and keep to themselves; (2) SEB’s 81% run-up since September, 2006; (3) Even more impressive 563% run-up over the past five years. Short-term, perhaps SEB has run out of gas and reading the quarterly report indicates that. First, let us reflect on the FY 2006 shareholder letter delivered to SEB holders in which the CEO publicly comments on the performance of the company’s stock price, a technique SEB rarely practices. Mr. Bresky was upbeat on the tremendous performance of the stock price but warned the stock price is likely experiencing a spike within a steady upward trend. It certainly appears Mr. Bresky was spot on, again, at least over the short term.

Seacoast is trading at about a 50% discount to its 52-week high which was reached before the widespread mortgage panic hit the markets and on speculation of a buy-out, especially after National City (NYSE: NCC) bought out Ft. Pierce, Florida based Harbor Federal for a big premium.
 
SBCF and Harbor Federal were very similar banks – both with 70+ years of history and were serving essentially the same areas, though Harbor expanded more to the north than SBCF did.  Many were expecting SBCF to be quickly scooped up by a larger bank following NCC’s acquisition of Harbor Federal, but it never happened and here are the compelling reasons why: