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Jim Cramer: On Foolish Knee-Jerk Reactions

We even saw it with Merck (MRK) in premarket trading, too. Taking the other side of the buyers there, enthused by an earnings-per-share beat, was like taking candy from a baby, because the revenue was weaker than expected. Plus, any cursory look at the release told you that the much-vaunted diabetes franchise, a big growth engine for a company without a lot of engines, had declining sales. That was a total shocker.

Sure, there have been plenty of instances when it's been worth beating people to the punch. I have seen times this year when so many people had been short the stock of a company with good news that sometimes, psychologically, it was just worth it to take some in when the shares were up a bunch of points. The possibility of a monster squeeze that can wreck a month, after all, is always on the table.

For the most part, though, it has been a stupid thing to do. And, for the life of me, given all of the metrics that now determine what happens with a stock, many of which you do not even hear about until right before the question and answer session, it's often more worthwhile just to take the other side of the trade.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL and ETN.

Editor's Note: This article was originally published at 6:51 a.m. EDT on Real Money on Oct. 29.

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