"TAP não sobrevive se se mantiver pública", garante Pinto Luz

[Ulisses Pereira]

"Know-Nothings Reveal Themselves Online"

By Jim Cramer
RealMoney Columnist
9/27/2010 7:41 AM EDT


"Let me give you some insights into how hard it is to do my show after the market's been up pretty much nonstop for the month of September. It has to do with momentum and greed -- handy, given the Wall Street movie sequel -- vs. fear of missing something and opprobrium if it keeps going higher and I suggest taking something off the table.

Last Thursday after the magnificent run, I did a show suggesting that it would be a darned good idea to take some stock off the table, particularly the stocks of companies that you are surprised have gone up relentlessly that you may now be too big in.

My suggestion came from the way I have historically looked at the market, a way that has been honed through many years of (successful) investing and the thesis behind many of the action in Action Alerts PLUS and in all my books to date.

The logic goes like this: we buy on the way down using a somewhat pyramid style with large scales between buys, so each buy is meaningful. Sometimes we will buy because the stock has gotten too cheap, courtesy of the market, and sometimes we will buy as a way to "trade around" positions that we believe can represent attractive trades on the way back up -- even if we are not that keen on them. These are "Threes," meaning that if the market advances you should sell some of them.

So, last Thursday made it clear on the show that it was time to peel off marginal positions. Take some profits in your non-faves. I said I didn't care where the market was, we got lucky given the bad claims news and some weak data out of Europe, so it is time to let go some of the trading stock, bought when the market was low. I didn't mean to sell stocks you really like that you think are going much higher -- for us it might be a Teva (TEVA - commentary - Trade Now) or an Apple (AAPL - commentary - Trade Now) or a General Mills (GIS - commentary - Trade Now) -- but as a discipline, you have to prune what's top-heavy that you don't like that much.

I regard this method as the essence of common sense, because just as you buy what's been made cheaper, you should sell what's been made expensive. Call it "buy low, sell high" for lack of a better cliche.


As part of social networking, which is something that has its uses, I get feedback from what people are saying about me. I was shocked Friday, when the market rallied, that I was roundly criticized for saying the market could go down.

I was, frankly, not amused. As someone who has been the most vocal bull -- most certainly on this site if not on television -- I thought I had earned the right to say, "Sell something and go buy a sweater." Who else has earned that right? The bears, who have fought the move every step of the way?

But the heat was massive, including from people who then alluded to the call that I said to buy Bear Stearns -- even though that never happened. I told people that I thought they could keep their accounts at Bear Stearns and they would not lose everything -- not the same as "buy Bear Stearns" -- but I am well aware that the story that I was urging everyone to buy Bear when it was collapsing is never going away because it is just too juicy not to say.

Anyway, when a call that says, "Take a little profit" is held up as idiocy and lunacy because the market went higher, I have a very specific takeaway -- even if you like the market, it has now drawn a fair share of morons to it that don't get it. Anyone who thinks it is wrong to take a profit and thinks it is going to keep going up is a real bad shareholder, and the essence of someone who has been crushed in 2000-2003 and 2008-2009.

I like a morning when I come in and Unilever (UL - commentary - Trade Now) buys Alberto-Culver (ACV - commentary - Trade Now) for a nice high price and the stock goes up. I like a morning when Sanofi (SNY - commentary - Trade Now) is lining up capital to buy Genzyme (GENZ - commentary - Trade Now). Who doesn't like it when the big European companies are taking advantage of their improving currency and doing some buying?

But as someone who has to do a show about buying and selling and how to do it, I am now concerned that the wrong people have surfaced -- the ones you can count on to be wrong EVERY TIME.

So we will continue to look for stocks to sell. We will continue to look for ways to lighten up for ActionAlerts PLUS, and I will continue to try to find only special situations that have room to run and otherwise keep saying "take some profits" going into October, in part because the idiots I read on Twitter who are criticizing me are the ones you have to bet against, even if you like the tape.

Forgive me, but I have learned that much in my time on the Street. What I didn't expect is a whole new audience that reveals stupidity online. Thanks guys!

At the time of publication, Cramer was long Apple, Teva Pharmaceuticals and General Mills. "

(in www.realmoney.com)