Nutty Nymex Still Looks Like a Good Buy

This column was originally published on RealMoney on Nov. 17 at 11:53 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

No, Nymex(NMX) isn't nuts. Not at all. Of course, this could be a little like the New York Stock Exchange(NYX) in that the first few days its stock traded were nutty and then it went down and stayed down for a while because it made the Euronext bid. I don't think there's anything Nymex will turn around and buy right now, so you're safe from that risk.

We're all so revolted by what happened in dot-com land (remember?) that we want to say "this is all baloney." I don't like that analysis. What that analysis says is that there was a stampede toward something worthless and we went and bought the worthless tulip, a la the Dutch bubble, hoping someone else would be even more stupid and buy it from us.

That's not the case here. This is more the case of saying, "OK, had I bought CME(CME) up 100% from where it came public, I still would have made great money." The comp is fantastic here. Plus the underwriters knew that the demand was much greater than this and they want you to make money. They aren't, unlike during the dot-com period, trying to get one over on you!

I urge you to think like this: Let's say the underwriters issued three times as many shares as they did at $19, and the stock opened at $44. Would you freak out? Maybe less than you are now. It still would be huge, but wouldn't seem as nutty to you.