Thought this might interest the conspiracy theorists here......
The Long and (No) Short of It
By James J. Cramer
12/26/00 8:42 AM ET
One of the great misconceptions about my writing is that I use it to bash down stocks
that my firm is short. Actually, the opposite is true: We never talk about our shorts.
We don't want anyone to think that we are using the site to profit personally from our
short bias.
I know it is stupid and irrational, but nobody gets mad when you tout when you are
long and everybody gets mad when you bash and are short. I used to argue that was a
ridiculous dichotomy, but I am done with my arguing stage. You can't change
everybody's view no matter how rigorously you debate.
I was never in to touting my positions, either. I never wrote, "Now is the time to buy
Compaq," in part because I wanted you to think for yourself and in part because I
knew that I would be taken apart for using the site to promote our own stocks.
But coming in January I am changing my roles. I won't issue trading advisories but I
will be much more of an advocate of my longer-term longs. (I will be a private investor
with strict non-trading rules similar to those that they have at The Wall Street Journal.)
And I won't sell short anymore. I will be "long only," like most of you. I will be free to
speak my mind negatively without people saying, "He is short those stocks, I know he
is."
I felt this charge acutely last week when I answered a question about CMGI in the
negative. I knew I would be besieged with email complaints about how I was short
CMGI secretly. From now on, with a "no short" rule, I will be speaking out much more
freely against managements that have screwed up, and talking negatively about
companies and fund managers who I think will cost you money.
To be free of the shorting charge (or, more important, to no longer fear that someone
will accuse me of shorting a stock and take that accusation to the government, which
will then dutifully check it out) will be glorious.
Ever since the Wavephore fiasco, where the government investigated me and my firm
thoroughly for knocking the stock even though we weren't short it, I have lived in fear of
another investigation over my trading. It did not matter that we had never traded
Wavephore; the embarrassment of the investigation to me, to my partners, to the
investors at TheStreet.com, and, most important, to my wife and family, was too
great.
When you get investigated by the government and it discovers that you didn't trade,
you don't get an apology. In fact, the investigation just goes away, after much
heartache and many lawyers' fees. You just get a big smudge on your reputation and
you think, when you are coaching soccer or when you are standing in the deli line at
King's, that people are saying, "That guy got investigated by the government and you
know they don't pick the names out of the phone book." The presumption of guilt, even
when you are innocent, is awfully great in this country. I felt it, big time. It makes you
incredibly gun-shy.
I am not saying that I will now be free to slander and shaft companies left and right. Of
course, that won't be the case. I am saying that I will no longer fear that phone call,
wanting to know if I were short a stock that I talked negatively about. Because I won't
be short anything.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At
time of publication, his fund was long Compaq. 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 send comments on his
column to James J. Cramer . |
