2 - Green Mountain? Same deal. A short-seller did a major number on Green Mountain last year, just like Ackman did on Herbalife. It worked. It knocked the stock down, just like Herbalife. But, like Herbalife, Green Mountain then delivered a quarter that showed good profit growth and added a buyback and a dividend. What I was saying about Green Mountain was pretty simple. In the end it is about the fundamentals, not the shorts or the longs, and those are signs of positive fundamentals, not negative fundamentals.
Now Herb has a rap about what the company's doing and how the earnings are low quality and the new system is a closed system. I don't want to characterize it. You can read it yourself.
My issue is, again, you now know the risks. They have been traced out for ages. The fact that the stock went higher, not lower, is a fact of life and it is not irrational.
You see, that's the point. It isn't irrational that either Herbalife or Green Mountain went higher. They delivered decent numbers, more buyers surfaced than sellers and the stocks went higher.I did not mean to insinuate that this was about Herb. I didn't mean it about Ackman or David Einhorn, who apparently doesn't care for Green Mountain still. What I am saying is that we should be just as suspicious of the motivations and timing of the shorts as the longs. When a long hypes a stock he owns, you should question it. When a short bashes a stock he's short, you should question it. Neither's gospel. But give me this, Herb. These stories both long and short are well known. The debate over these two is like the lesson we learned in law school about the house that's built next to the quarry. If you buy that house you have "come to the nuisance." You should have no expectation otherwise. The odd thing? How is that even controversial? The fundamentals do control, and in these two cases, well-vetted, well-versed situations, there are more buyers -- no matter how wrong you think they are -- than sellers. I do not know how to sum it up other than to say, that's all there is to it. No offense meant, none given. Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in stocks mentioned. Editor's Note: This article was originally published at 7:15 a.m. EST on Real Money on Nov. 26.