Panera Rises on the Backs of the Shorts

The power of these anti-carb shorts and their ridiculous covering is unbelievable. Did these shorts, who obviously have no idea how to trade, really think that the Atkins diet was going to knock out a fine chain that sells natural, good food in places that are fun to eat at? Did people really think that Panera (PNRA - commentary - Cramer's Take) was a high-carb play? Heck, when I take my wife to lunch there, I never eat the bread. It's a good tasting, healthy McDonald's (MCD - commentary - Cramer's Take) alternative that happens to smell like fresh loaves, but not more than that.

How do I know it is the shorts driving up Panera? Because longs don't go nuts to the upside like this. They don't take and take and take on a good quarter. They have some patience. They use limits. They don't panic up. They panic down! That's the nature of the mutual funds out there: They move things up gradually on the upside but they barrel out like there's no tomorrow when things go bad.

Hedge fund shorts are the other side of the same coin. When things go unexpectedly well, as they just did with Panera, they go crazy to the upside.

Sometimes, back at the hedge fund, I would be able to psych out these moves and play them to the long side when I saw them coming. I can tell you that I still would be waiting to sell, because the shorts will just panic and panic and panic until the stock goes to some level where it starts going down.

Only then would I sell my stock. Because these jokers never know when to quit.

Random musings: Can you believe this First Industrial Realty (FR - commentary - Cramer's Take)? It is one of my favorite REIT names, but I think enough is enough and it should be scaled out of here. ... How luckless is this IAC/InterActiveCorp (IACI - commentary - Cramer's Take)? I think it's probably done going down ahead of the moves that it is going to make. ... I would sell Qwest (Q - commentary - Cramer's Take) hard if I owned it. The market has spoken, and it's too ugly to be bought and it's too ugly for you to take its paper in an acquisition. It's one of those stocks that has to come down before anything meaningful can happen. That's another stock where the claims of "better than expected" were just plain laughable.

---

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."