here. read the whole f*cking thing... what a sell signal.
Bears Keep Trying to Invent Negatives
By James J. Cramer
07/09/2003 09:21 AM EDT
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One of the toughest things about being a bear is the dynamism of the market, its self-correcting tendencies that force you to rethink and that crush permabear status.
For example, one of the bears' greatest bones of contention is employee stock options abuse by companies. Bears say these options distort earnings, create short-term incentives to do the wrong thing and amount to built-in chicanery.
Few companies had more of this kind of chicanery than Microsoft (MSFT:Nasdaq - news - commentary - research - analysis). As long as Mister Softee was out there with its gigantic options program, it would be difficult for others, particularly other tech companies, to reform themselves.
Tuesday, Microsoft did the right thing. Voila, major bear fodder disappears.
During periods I was heavily short, I had my reasons for being bearish. What allowed me to make so much money during the good times was a grudging recognition that when something good happened, something unforeseen that was good, I had no ego involved. I just said "You know what? That factor was something that bothered me and made me negative, but it doesn't hold anymore, so I must be more positive."
I didn't say "Here are 10 more good reasons to stay short." I just never did that. It bothered people immensely, particularly in my later years at my hedge fund, when I wouldn't be willing to debate, say, with the trader, about whether I was right or wrong. I didn't have time. Too much money to be made.
I don't see a lot of that kind of thinking now in hedge funds. I see just the opposite. "Oh, so Microsoft did the right thing? Well, I am not changing my view until Cisco does the right thing." And then when Cisco does the right thing, "It's Intel that I'm waiting for." And so on. This kind of anti-empirical logic abounds on Wall Street these days. It is really costly.
So many things have improved in the last six months that it is hard to keep inventing new negatives. (Check out Tom Kurlak's great column today if you don't believe me. Look at all that has changed.)
Yet, people still look for new negatives. It isn't just in tech. This morning, an analyst downgraded Alcoa (AA:NYSE - news - commentary - research - analysis) after its first good quarter in years. It is a silly call, and he will be wrong. But there will be people who take action on it because they think, like the analyst, that nothing has gotten better out there, that the reflation scenario isn't taking hold and the economy isn't getting better.
If you are in that camp, if you are inventing new reasons to stay negative, sell or stay on the sidelines, your problem is not the business of money management. Your problem is not the stock-picking process. Your problem is like one had by so many generals in so many wars. You are stuck in the psychological mindset of the searing period we just went through. You are fighting tanks with cavalry. You are wondering what the enemy intends to do with those flat-topped boats and those things on it that look like mosquitoes.
Best of luck. Come up with a new game plan. |
