Qualcomm's Win Gives Analyst a Loss

As I look at these two pathetic downgrades, of Broadcom (BRCM - commentary - Cramer's Take) and now Qualcomm (QCOM - commentary - Cramer's Take), by Merrill Lynch, I marvel at the luxurious position the portfolio manager has over the analyst.

I liked Fording Coal (FDG - commentary - Cramer's Take). After I bought it, the company twice lowered guidance from what management said it could produce. Once, OK, not bad. Twice, you are out of my ActionAlertsPLUS portfolio. This is the NFL.

But how about the poor Merrill guy who downgraded Qualcomm ahead of the excellent quarter and terrific outlook announced last night? What can he do? He has do to what all analysts do; he goes in the bunker and he reiterates the hold. He has to find flies and hair on the Qualcomm quarter. He digs in about the patent disputes, making them more than they really are. He comes up with some macro case that makes Qualcomm less compelling.

That's the lot of the analyst. He either makes a switch, the way that swivel-headed Deutsche Bank analyst did the other day, downgrading Knight Ridder (KRI - commentary - Cramer's Take) to a sell and then taking it to a hold, or he digs in his heels. Both make a bad situation worse.

What should he do? What Eagles coach Andy Reid did after last week's horrible loss by his team against Denver: Stand up, like a man, and say "I blew it." You know what, I don't want Andy Reid fired now.

I wish I could say the same about the Broadcom-Qualcomm downgrader at Merrill.

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At the time of publication, Cramer was long Qualcomm.

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 ActionAlertsPLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." Cramer appreciates your feedback and invites you to send him an email by clicking here.