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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV