The Folly of Chasing

The chasers are out in full force today. And I don't get it. Why can't the people who need in so badly sit there on the bid side? There are plenty of sellers out there.

We see this ridiculous pattern and we have to marvel at those who simply do not understand that if you want to outperform the averages, you have to be smart about buying.

Today, for example, there have already been several moments when if you simply waited you could buy Apple (AAPL - commentary - Trade Now) a buck and a half below the chasers. The banks are simply ridiculous to chase. As much as I like Bank of America (BAC - commentary - Trade Now) and Wells Fargo (WFC - commentary - Trade Now), there are sellers everywhere. Why reach for Goldman Sachs (GS - commentary - Trade Now) when it is obvious that there are people who want to bang the heck out of it?

The buyers of tech are particularly impatient, as anyone can see from the takers of EMC and VMware (VMW - commentary - Trade Now) or the futures run-up of any of the semis.

I am also not buying the chasing of Caterpillar (CAT - commentary - Trade Now), which has been up endlessly. These are simply stupid, impatient buyers who can sit on the bid side and buy all they want.

It is as if the big mutual funds are just using market orders, buying right in there with the ETFs.

It will cost them. Especially because I believe Doug Kass will prove right with his allocation outlined yesterday. And his new piece about the highway to the danger zone.

Random musings: Sorry to be heated in Columnist Conversation, but the defenders of endless commodity deregulation have to stop confusing manipulation with speculation. Total straw-man argument. ... The Richmond Fed was out this morning with its survey, and it is showing less of a decline in business but terrible retail numbers. I remain very nervous about the retailers.

At the time of publication, Cramer was long Bank of America, Wells Fargo, Goldman Sachs and VMware.

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