Cramer self-flagelates for his call to "get out". I now have a renewed respect for Mr. Cramer.
From thestreet.com
Wrong! Rear Echelon Revelations: Mea Culpa
By James J. Cramer
10/19/98 7:53 AM ET
What do you do when you've made a bad call? When you are on Wall Street you caveat it, you bury it, you disguise it. You rationalize it. You do everything you can but admit it. You never apologize. That's unprofessional.
But just because you are on Wall Street doesn't mean that you have to adopt the ways of the two-faced and the forked tongue.
Two weeks ago, on a day when Cisco (CSCO:Nasdaq) was down nine on a bogus downgrade and Dell (DELL:Nasdaq) was cascading through to the 40s, the market looked the worst that I have seen in many, many years. I wrote about it, as I saw it, after talking with my partner, Jeff, and my wife, Karen. We were marveling that if the Fed did not ease we were truly going to hell in a handbasket. I warned about the handbasket; I did not mention the saving ease.
That afternoon, Ron Insana broke the story that the Fed was holding a conference call to talk about an interim ease. If you check back on a chart, the bottom for this current move began right at that moment. In fact, this whole upswing can be traced to that story. Had I known that the Fed was about to have an interim ease, or was even talking about it, I would not have written that story. Heck, I would have been buying and noting that, as all I try to do is tell you what I see and what I am doing.
I didn't know. The story was wrong. I was wrong. I made a mistake. Hindsight says that the mistake can be excused because I did not know the Fed was going to ease. But to not admit it was a mistaken call is to put myself right in the crosshairs of my own column, where the rule is mistakes are okay, as long as you admit them and learn from them, but mistakes not acknowledged are corrupt and stupid.
If I am ever going to be able to criticize a Biggs for being too negative or an Acampora for swinging too frequently, I am going to have to have my own judgment days where I admit to failure. That call, that $*%$*%^ haunting call to get out, was just plain wrong in retrospect. A true visionary would have said, "The Fed will not let this crash happen. It has learned from '87 and '90. It will not do the wrong thing." In other words, had I more faith in the Fed I would have been buying, not selling. Had I had more faith in my own knowledge of this Fed's history, I would not have been panicking.
I owe an apology to you, our readers, for getting that wrong. Sure, the next day I did my best to point out that if the Fed eased, then it would be time to buy. And I also wrote a half dozen columns about how the Fed must ease to avert a catastrophe. But that is what I should have written to begin with.
This is a great and powerful medium, this thing called the Net. It allows you to reach out instantaneously. Sometimes too instantaneously. Had I not filed a piece that Thursday, that Thursday of the bottom, until after the close, it would have contained the caveat that the Fed might ease and make things right. But I did not wait. That said, I did not give a dishonest depiction of that was going on at my firm. My wife had come in because it felt so bad, so weird, that I wanted all hands on deck. The day started uglier than any in recent memory, and Nasdaq looked to be obliterated. Nevertheless, I regret greatly that I wrote such a negative article, because that article was not based on what was about to happen, it was based on what was happening on my screen.
What can be done about this in the future? I am not sure. Sometimes I am just going to be wrong. I don't want to be hung on a view that I have to throw away because something has changed. My negative view had been based on a too-strong dollar, a Japan that could not produce reform, a Fed that was asleep at the switch, and earnings that looked to be awful.
But we are beginning to get Japanese repatriation, which will give them the assets they need to clean things up. The strong dollar is history, courtesy of the rate cut, the Fed is more on the case than I thought, and earnings, while truly terrible, could get better with the world being reflated.
No matter, I made a mistake. I am sorry if it caused people to panic. That was wrong, too. That day was a day to have ice in your veins, and I had blood in mine. Guess that comes with the territory sometimes. You all have my apologies and a vow to get it more right next time. And to admit it much sooner than I did this time. Because that, too, was wrong.
If it is any consolation, unlike the talking heads out there, this call cost me money, too. That I was able to recover is all well and good. But if I am to have any reputation at all, I have to hold a lamp up to when I am wrong. That's what this column is about. |
