Smarter Money: Exit at the Ramp
Hey, maybe the
Fed
knows
Buzz
and
Batch
! Maybe the Fed feared that Buzz and Batch would be back in action, big time, marking stocks up way too much vs. the fundamentals if they had done 50 basis points. (Buzz and Batch are fictional characters at a fictional mutual fund that buy their own stocks up to generate some fleeting performance.)
Yes, it is that time of the year, the end of the second quarter, when managers have to do their best to keep their favorites up in order to stem the redemptions. In the next 48 hours, I suspect, if there are no preannouncements, we are going to see lots of the old fave tech names start ramping as managers try to escape from the down 20% level, a level that many are worried could mean that they will face vicious redemptions as the second half begins.
I doubt people will be very patient now that they have had more than a full year of declines. What should you do? Simple. Sell these funds into the ramps. I would sell some into Thursday, some into Friday and then finish up next week on the first day of the month.
That way you will get the best prices.
I wish I could tell you that people don't mark up their own portfolios. But until the feds bring a case against someone for buying up and moving stocks to increase performance, a very hard case to make, you can expect these managers will overinflate their returns, and the only way to profit from it is to pull out. Now.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to
jjcletters@thestreet.com.