The Day Something Snapped
By James J. Cramer
12/5/00 7:32 AM ET
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We had just finished a magnificent trading day, making money, big money, despite the decline in the stock market. Jeff Berkowitz and Matt Jacobs provided us with continual gossip out of the Credit Suisse First Boston conference, while Todd and I manned the office and made terrific bets, mostly against stocks. I would have gone home just then, after penning my closing column, but there was still one more big report to come. After the close we huddled around our screens, waiting for Brocade (BRCD:Nasdaq - news - boards) to announce its quarter. Long a favorite of mine, Brocade represented the remaining momentum position on our sheets, a hard-won position in an office where we think the momentum stocks, or the one-time momentum stocks, are simply poison. Owning Brocade had become a great source of internal tension. How could we be long a momentum stock at a time when momentum funds are being taken out and shot on a daily basis? What made Brocade so immune? Who was I to demand that Brocade stay even after I had bashed all of the other momentum stocks in our meetings at Cramer Berkowitz and in my columns? To which I always said the same: Brocade is out-executing everyone -- everyone! -- and until it is done out-executing everyone, I want to be long it.
Then Brocade reported. It was a perfect number. Picture perfect. There was some smashed fly on the wall who may have been looking for some sequential number that was stronger, but that's a pile of *&@#$! This was all upside. Thing of beauty. Mesmerizing in its perfection. Of course, though, Altera (ALTR:Nasdaq - news - boards) picked that moment to blow up. Big-time.
While Altera is barely correlated with Brocade, the latter started sinking like a stone. I knew it was a buy as I saw it slice through 150, and we bid and got hit for some. Whack, right upside the 150 head. Next thing you know, however, it is at 144. Down six. In 60 seconds. Like some sort of Mercedes in reverse. I am out of answers. I think that is just plain wrong. We are playing lean, however, and I didn't want to inflict any damage on our year. I listened as someone on the tube yammered that the stock was going lower. I saw the bids disappearing. I saw the loss mounting. I was sweating and angry, shaking my head. Todd-o looked at me and asked me what was wrong. He wanted to know how he could help me. That is was no big deal. We blew it, no big deal.
"No Big Deal?" I screamed. "No big !@#$%! deal? Hundred Gs just like that is no big deal?" He coolly reminded me that we had made over a million dollars trading that day. I could not be soothed. "Who the !@#$%! cares about the million dollars when we just lost on Brocade?" I shouted. I don't even know why, but I punctuated each word with a smashing of my key board. "Don't you understand that?" I shouted, keys flying all over the place as my key board cracked in half and then in quarters as I dashed the remnants. " Don't you know that's how I think, how I am?" And with that I grabbed my phone and mashed every key on the board. The plastic pieces shot left and right, six, ten feet in an arc.
"Not only that," I said, as I crushed my phone against my desk, sending splinters of black plastic toward my friend Jeannie Cullen, "but the day I stop caring about those hundred Gs is the !@#$%! day that I should hang it up. That's the day they carry me out of here. That's the day I deserve to be carried out of here." I then dashed into my private office, paged Matt and Jeff in Scottsdale at the conference, and screamed the same illogic at them, breaking a second keyboard, a coffee mug and a half dozen pencils. I was out of my mind with anger about the stupid Brocade. Caught, like those morons Buzz and Batch, I said to myself. "No better than those mo-mo fools," I screamed to the shellshocked office, everyone with head down, perhaps because they didn't want to be hit by what I shattered next.
I was shaking, just shaking. Livid that I had screwed up the Brocade. Ruined the day. Botched it. Just !@##$%! botched it. I sat at my desk for an hour after that. Tension rolling up and down my body. Trying to figure out how I could still be so upset after so many years of doing this job.
Meanwhile, though, we didn't sell Brocade at $144, we held on and now it's at $184. Buys a lot of keyboards!
But sitll, as I went home that night, I thought about what I said: The day I stop caring about Brocade is the day I should hang it up. And I realize that I had it wrong. I would never live to see the day I stopped caring about Brocade if I kept up like this. I would indeed be carried out, with an epitaph no better than, "Beaten by Brocade." That's when I knew it was time for me to make a change.
Oh sure, I had been thinking about it ever since 1997, our glorious plus-60% year that I should have retired after, but, no, I had to have another go-round. I had to have one more year. And then in 1998, my well-chronicled failure occurred, the plus-2% year when it should have been 50%. I have written extensively about that year, but there was no way to hang it up after that. That's how bums go out. Ain't no bum. Not this guy. Sure we shot the lights out in 1999, but who didn't? How many readers wrote me that out plus-62% was chickenfeed compared to what they did with leverage and a lot of Island or E.piphany or Applied Micro Circuits. Nah, 62% didn't mean jack.
This year, however, as I watched one momentum fund after another stumble, as I watched the chartists get blown out and the daytraders and hyperleveraged hotshots get blown back to their day jobs, I knew we were working on something big, a big plus-30% year, or more, trading, betting health care, betting against capex, betting with the foods, betting against the semis. This year it all came together for us, as we had zero tolerance for errors, zero tolerance for the Brocade speculations that I had just insisted on. We played to the hilt, with everything we had, with hours extended far beyond reason with an intensity that bordered on -- and, in my case, had crossed into -- the insane.
The very next day Jeff mentioned we couldn't keep going like this. Something had to give. Nobody could live like this, nobody could function in a world where the right thing to do was to be carried out horizontally because that was the only way to prove, in the end, that you cared as much as you should. I agreed. I said it was time for me to retire. And I did. |
