Cramer - raise cash on any bounce -
The Prudent Action: Raise Cash on Any Bounce
By James J. Cramer
09/19/2001 01:40 PM EDT
What do you do when you want others to panic, but
not you or your readers? What do you do when you
sense that we can't get a bottom because there are
too many people who are too calm and too
conditioned to buy on a dip?
That's pretty much where we are. When I was reading Helene's piece this morning
and her piece from the other day (the one that was regarded by some, wrongly, as
unpatriotic), I was struck by the same lack of dislocation that would have marked a
solid bottom instead of this slogging-out process that seems to be endless.
In the great bottoms of our lifetime, including the most recent great bottom of Oct.
8, 1998, where we took off and haven't looked back (until now), we had massive
dislocation. We had everyone who wanted to sell, sell, sell.
We don't have that now. We have in some ways just the opposite. We have this
controlled, orderly decline. We can't seem to get rid of the weak hands. We have
too many people liking equities too much, given the change in risk. This morning
when I wrote a piece about how being 100% invested here was a mistake, initially
my editor posted a headline that said I favored bonds.
She and I were both afraid that people would interpret my call as a sell call. Not
true. I have been buying, not selling. But I have the luxury of being able to buy. I
had been raising cash for months and now I felt I could put it to work. (Click here if
you want to see what I am up to.) I can afford to pick up a little stock.
If you can't, or if you don't have any cash on the sidelines, you have to hope (I hate
that word when it comes to stocks) that we bounce so you can raise cash. When it
happens, will you raise some? Or will you just sit tight and run the risk that
everything will work out just fine over the near term.
I think you should raise cash on any lift. We had a little lift this morning, and that
was a great opportunity. Because we are down so much and so hard, I think we
will get another bounce. Use it to sell the marginal stocks and raise cash, please!
That is prudent. It is right. I know it with all my brains and all my heart. Please do
it!
Random musings: Call me to talk about this stuff at 1-800-862-8686. We can
work it out together. Between 3 p.m. and 4 p.m. EDT, for RealMoney, the radio
version. |
