Not Getting Tangled Up in Encore Wire

Nothing bothers me more than when someone tries to pimp me, tries to get me to write about a company that could hurt you or to talk about a stock positively on "Mad Money" that I don't believe in. Actually, there's something that does bother me more: a mass, orchestrated campaign to get me to hype a stock.

For two months now I have been urged, cajoled and beseeched to talk up Encore Wire (WIRE - commentary - Cramer's Take), a company that makes copper wire largely for homebuilders.

The whole time that I have been pushed, this stock has been in free fall, down from $40 to $23. I am proud that I sidestepped this nightmare of a stock for all of my audiences. This is the type of stock that, had I listened to my critics, I would have crushed people in, just poleaxed them. My credibility would have been shot to smithereens if I had gotten behind this plummeting piece of merchandise.

This morning, the lunacy continues now that the stock's been trashed. Take a look at one of my emails:

what kind of drugs are u taking? I just caught the replay of Mad Money. I went out and bought your book a few months ago and correct me if I am wrong you spent a whole chapter on spotting bottoms and buying when no one wants them. WIRE is a classic example of what you described in your book. WIRE is trading at 4 time earnings and will do $6.00 a share easily this year. The stock is overdone to the downside, I think you don't see the reversal is just getting underway. Do you have an axe to grind with WIRE? Are the greedy shorts in WIRE friends of yours?

Put aside that the shorts have been trying to crush me for recommending the longs they hate. Forget that Encore Wire is levered to the worst part of the economy and that it has missed its estimates big-time and has had its earnings estimates for the future slashed, so who trusts that number?

What matters most is that I have been right, and that even if there is a turn at hand in the name, I feel great about what I have done here.

What's really motivating these emails? I think I know what it is: an attempt to get me to get a short-squeeze going. Encore Wire is heavily shorted, almost half the float! If I bull it, the squeeze is on.

But why should I?

People recognize that there was a squeeze in a stock I like very much, Crocs (CROX - commentary - Cramer's Take), which had a similar short position. But that was because I actually saw the company repeatedly beat numbers, and that's what moves stocks higher.

If Encore Wire beats numbers, or even shows a hint of beating numbers -- perhaps because copper, its raw cost, comes down -- I will get less negative on it. But I am not about trying to a squeeze and I am not about doing favors. I am about being right and making money, not being wrong and losing money.

Short-busters in Encore Wire, take heed. Go trash me on the stock chat boards. Go squawk. But perhaps what you should have done was listen to me. Then you would be making money, not losing money. Isn't that, after all, the real game?

At the time of publication, Cramer had no positions in any of the stocks mentioned.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim 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. 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." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.