Cramer: "Throw Your Wallet Into the Gaping Maw"
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Cramer: "Throw Your Wallet Into the Gaping Maw"
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"Throw Your Wallet Into the Gaping Maw"
By James J. Cramer
RealMoney.com Columnist
6/1/2005 1:01 PM EDT
"You want the real explanation for this rally? Three little words: "Not long enough."
When you consider that it's been a mistake every time to buy stocks after a couple of weeks of rallying, you can understand how breathtaking this rally feels, and how frightening it might be to many hedge fund managers out there.
When you are a hedge fund manager who's down a couple of percent, nothing's worse than when the averages break into the black. You are caught with your pants down. You can't say, "Everybody's having a crummy year," because not everyone is anymore.
That leads to the wallet-into-the-mouth approach to investing that I am seeing right now. When I was running my hedge fund and I felt or smelled that people weren't long enough, I would be jumping up and down throwing my wallet at an imaginary maw and shouting, "Don't you see how hungry the beast is?"
New employees would look at me like I was nuts. Old employees would be busy drawing up lists of companies that we liked for just this kind of occasion, part overly-shorted, part momentum and part just liked enough to buy.
Classic example: Going into a moment like this back then, I would have been dreading what would happen with J.P. Morgan (JPM:NYSE - commentary - research). Its numbers got cut this morning, so I would have figured, "Here we go again, back to $34." Now, though, I would be saying, "Take J.P. Morgan, every hedge fund clown knew that numbers were coming down. Take that sucker. Make 'em pay," even as it would have been me that would have had to pay on any other day.
You get real ripsnorters when patterns break. The pattern that was, "This market always stinks after a couple of up weeks" just got broken.
The maw needs to be feed.
Feed it. "
(in www.realmoney.com)
"Throw Your Wallet Into the Gaping Maw"
By James J. Cramer
RealMoney.com Columnist
6/1/2005 1:01 PM EDT
"You want the real explanation for this rally? Three little words: "Not long enough."
When you consider that it's been a mistake every time to buy stocks after a couple of weeks of rallying, you can understand how breathtaking this rally feels, and how frightening it might be to many hedge fund managers out there.
When you are a hedge fund manager who's down a couple of percent, nothing's worse than when the averages break into the black. You are caught with your pants down. You can't say, "Everybody's having a crummy year," because not everyone is anymore.
That leads to the wallet-into-the-mouth approach to investing that I am seeing right now. When I was running my hedge fund and I felt or smelled that people weren't long enough, I would be jumping up and down throwing my wallet at an imaginary maw and shouting, "Don't you see how hungry the beast is?"
New employees would look at me like I was nuts. Old employees would be busy drawing up lists of companies that we liked for just this kind of occasion, part overly-shorted, part momentum and part just liked enough to buy.
Classic example: Going into a moment like this back then, I would have been dreading what would happen with J.P. Morgan (JPM:NYSE - commentary - research). Its numbers got cut this morning, so I would have figured, "Here we go again, back to $34." Now, though, I would be saying, "Take J.P. Morgan, every hedge fund clown knew that numbers were coming down. Take that sucker. Make 'em pay," even as it would have been me that would have had to pay on any other day.
You get real ripsnorters when patterns break. The pattern that was, "This market always stinks after a couple of up weeks" just got broken.
The maw needs to be feed.
Feed it. "
(in www.realmoney.com)
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