Sneak Preview: Piggyback the Right Way

The stock soon moved up 4 points and I figured, why wait to see if Pzena still owned it when I could take the terrific gain? Not long after I sold, I saw that Pzena had increased his position and become the largest holder of the stock. I didn't want to buy it back -- I should have, but I was too proud (another lesson learned, but something you shouldn't have a problem with; I was hung up on buying back because every move I make is public).

Over the next year I watched it go up and up until it had doubled from where Rich had bought it. I could have piggybacked all the way, but instead I got off despite my desire to mimic this great investor.

Cramer on Stocks vs. Mutual Funds

If you are in a stock because some great manager likes it and you monitor the story and it doesn't change and the manager doesn't sell off some of the holdings, why sell? While a gain is never "costly," it glares at me that I bought it for one reason, the piggyback, after he had done all the homework for me, and I acted, with my selling, as if I knew more than he did. I didn't! My belief was in him and his abilities. He never wavered. I did, and I left an outsize gain for him and his investors without me. Stay on the bull that brought you to the party.

Editor's note: This is a special sneak preview of Jim Cramer's just-released book, Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer). Look for more sneak previews every day, and get your free copy with your annual subscription to Action Alerts PLUS; click here for details. Catch Cramer in person to get it signed: Wednesday, Dec. 12, at 7 p.m. in Bridgewater, N.J.'s Borders; and Saturday, Jan. 12, at 1 p.m. in Westbury, Long Island's Costco.

Missed the first sneak previews? Read the book intro and the rules of getting and staying rich: Rule 1, Rule 2, Rule 3 and Rule 4.

---

Please note that due to factors including low market capitalization and/or insufficient public float, we consider American Physicians Capital to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

>To order reprints of this article, click here: Reprints