A Selloff Tests Armor's Mettle

Following up on my blast of Ed Lampert last week, I noticed Jim Cramer came to the defense of the Sears chairman on Thursday, "Sears Foes Misfire." The thrust of his argument was in this sentence:

I don't believe people realize that someone with a financial head who is also smart and has a clue of how business works is going to have a huge leg up in retail, where most of the people, frankly, don't have those pluses at all.

Now, I've heard the argument before that "most of the people" in retail have no idea how business works. And that if you're smart about how business works you'd have a huge leg up. Let me tell you a brief story then.

About 15 years ago, I was living in Dallas and was an IBM guru on supermarkets. Food Lion was coming to town, and I was asked to come speak to Kroger about my view of the situation. My basic premise was that Food Lion was so smart about business, so savvy about use of computers (it was a huge IBM customer at the time), and so rigorous in cutting costs, that it would eat Kroger for lunch. The Kroger execs laughed at me, basically telling me I had no clue what I was talking about.

Kroger ended up destroying Food Lion in Dallas. The smart merchant creamed the sophisticated "business folks."

Apart from that, I've found few instances in which an expert in one endeavor leaps into another field and rises quickly to the top of the heap. Instead, most Bo Jackson-wannabes end up like Michael Jordan the baseball player: all hype, no bat.

In any event, it'll certainly make for a good business saga and I know many will be watching closely.

Today, charts for the Nasdaq Composite, Celgene (CELG - commentary - Cramer's Take), Dow Chemical (DOW - commentary - Cramer's Take), San Juan Basin Royalty Trust (SJT - commentary - Cramer's Take), Annaly Mortgage (NLY - commentary - Cramer's Take) and Armor Holdings (AH - commentary - Cramer's Take).

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Charts produced by TC2000, which is a registered trademark of Worden Brothers Inc.

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And that is the final word from the Delta Crown Room, where nearly half the U.S. passenger seats are now in the hands of bankrupt companies. What a strange, tough business to be in.

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Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes a daily technical analysis column for RealMoney.com and also produces a daily premium product for TheStreet.com called The Chartman's Top Stocks -- click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.