Lots of times, people just don't understand that it is OK to dislike a company but like the stock. Other times it is OK to think a company's terrific but its stock is horrendously overvalued, and yet still worth buying. This is a debate that is age-old, but is being rekindled -- aggressively rekindled -- now that Herb Greenberg has rejoined the fold. My logic to this conundrum of when good things happen to bad stocks is simple: I am gaming the life cycle and the process of the "loved" enterprise, not the valuation -- or, more precisely, overvaluation of the stock. I am predicting the mania and harnessing it for profit, and much as Herb Greenberg wants to call this the "Greater Fool Theory" (see his rebuttal here), I think that my way can make us all money, which is why I, of course, promptly renamed it the "Smarter Fool Theory." I am saying that, if my method works for you, use it. Just be mindful that, when it is done working, it can really crush you. So at all times do it with deep-in-the-money calls to cut off your downside. You buy Netflix ( NFLX), Tesla ( TSLA) and Herbalife ( HLF), or even Ulta ( ULTA), Lumber Liquidators ( LL), and Tractor Supply ( TSCO), with deep-in-the-money calls, so if it does go bad, you are stopped out. How important is this? You could have saved yourself 100 points of loss in both Chipotle ( CMG) and Intuitive Surgical ( ISRG) when the music stopped. That's the best way to game the process of cult love, even if it is an expensive way to create a stock. Now, when I was at my hedge fund I used to come on "Squawk" during the Mark Haines days and during the break Mark would ask me what I was thinking about. I would say, "Oh, that company's awful but its stock is going higher" or, "This company's stock is ridiculously expensive but much loved." He never questioned me as being two-faced or lacking in rigor. He never said, "Cramer you are being preposterous, it can't be a bad company yet a good stock." He said, simply, "you know what? I am going to call you a preacher and I am going to call you 'reverend Jim Bob from the Church of whatever's working now.' " He understood. He got me. He got that I wasn't being a duplicitous joker but I just understood what was working now. I am no longer at my hedge fund. I run a charitable trust, along with Stephanie Link. It is definitively not about what's ever working now. I don't advise most people to play whatever's working now because when it stops working -- even if I say the day before that it is going to stop working -- people who didn't hear that sell call will be all over me and it will be played on YouTube endlessly as if I never told you to sell. But when I do a series like the anointed stocks, meaning when I say that Netflix is going to go higher I am not going to pass judgment on Netflix. I am not going to say "it shouldn't be anywhere near here," because that's not the point. The point is that Netflix is working and because it is working the buyers will keep flooding in to it. I have been saying the same thing about Tesla, because Tesla is the definitive "church of what's happening now," stock. Its valuation is absurd but it's been absurd for 120 points, 120 points that I wanted you to catch. Now, let's take the case of Ulta Salon. Now here's a company that's been red hot, there's no denying it. I am predisposed to like it because, again, it's working. But when I read Herb Greenberg's excellent piece on Ulta and the potential inventory issue, as Herb did some terrific ratiocination about Coty ( COTY) and Ulta's sales I said, ah hah, real red flag, that stock's going to get hammered some day. But the emphasis must be on some day because, given the fact that the company just reported you won't know if Herb is right for a very long time. In the interim I think the momentum funds take it ever higher. That's an example of a company I don't like that's appended to a stock that is most likely going higher. Same with Herbalife. Do I like the practices of the company? I don't particularly care for that kind of direct selling model where I think that recruiting can be more important than actual sales of the product. But that model sure works for Tupperware ( TUP), so I don't judge it negatively. Is Herbalife using best practices within its model as I think Tupperware is? I think it wants to. I think it tries to. However, I think it's very hard to police. Now, here's where it gets really sticky. I have read the brief against Herbalife from Bill Ackman, and I recognize that Ackman paints a picture of a company that should be shut down. I would never, in a vacuum, ever consider owning the stock of a company that the regulators might want shut down and Herbalife has a better chance of being shutdown than just about any company I follow.