Wrong! Dispatches from the Front
Summer's Little Trades
By James J. Cramer
6/8/99 2:05 PM ET
URL: thestreet.com
"Broadcom's (BRCM:Nasdaq) up 3."
"Sell it."
"Inktomi's (INKT:Nasdaq) down 2."
"Buy it."
"IBM's (IBM:NYSE) down 2."
"Buy it."
And so on. Yep, we are range bound, and when we are range bound, we try to make little trades. Periodically someone will come in with a piece of merchandise for sale -- 200,000 American Home (AHP:NYSE) "in the hole," meaning a slight discount -- and Jeff and I will scratch our heads and try to figure out whether it is enough of a discount to tempt us. It hardly ever is.
Sometimes it is just measuring the rhythm, probably some sort of internal process that we all perform. "International Paper's (IP:NYSE) been down for three straight days, what do you say?"
"Sounds good. Let's take down some below $50, business is fine."
Sometimes it is the urge to do something, and you have to check yourself from trying to snap the ennui through purposeless trading. For example, I wanted to buy some EMC (EMC:NYSE) this morning. But what's my edge? What do I know that is different from when I sold it higher?
Other times it is strictly on price. "We said we would let go of Rambus (RMBS:Nasdaq) up here."
And we kick it out.
Yep, it's the summer, prone to sudden selloffs and amazing rallies on two ticks of a long bond, but mostly prone to, well, nothing.
When I traded with my wife on days like this, I'd pester her endlessly about taking some Cisco (CSCO:Nasdaq) or selling some Tellabs (TLAB:Nasdaq). But she'd just give me that sour face and break out the cards in a loud series of shuffles.
And I would bet on kings and queens instead of stocks and bonds. And I would lose much less money.
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James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco, IBM, Inktomi, International Paper and Tellabs. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at jjcletters@thestreet.com.
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