That's pretty much the distillation of the best conference call of the year, CEO Gary Friedman's soliloquy on the Restoration Hardware (RH) - Get Reportquarter. Friedman's doing new and different things. He's reinventing the category and creating museums to furniture and fixtures, allowing you to see them in a context that gives you ideas and forces you to think big, as we did when remodeling a host of rooms using RH goods. He's about creativity and is playing a long game and he wants shareholders to do so, too. Or else.
When the quarter was reported you saw the traders hit the road, not understanding what Friedman is trying to accomplish, even as investors flocked to the stock to share in his vision for the future of what bricks and mortar will be like and his hard-driving ways that are masked by the piano music he set his video conference call to.
I am thinking about Friedman's's strategy because it is sorely needed for a host of stocks, particularly the biotechs that are trying to do things new and different with a long-range view. I keep waiting for one of the CEOs to step up and say what Friedman said, which is basically, "Look, if you don't understand what we are doing, if you can't figure out that we aren't going to build blockbusters in a day, get the heck out of my stock."
I write this because for the last 10 days, after the peak in the biotech frenzy, I have been inundated on Twitter about what to do with these stocks now that they are down. The truncated plea usually goes like this: "Bought Regeneron at your recommendation 20 points higher, what do I do now?"
To me what that says is that you bought the momentum of Regeneron (REGN) - Get Report when it was running, which I typically do not counsel to do and didn't in this case where I was warning you to take profits. You have no idea what CEO Len Schleifer at Regeneron has built and is building, including the asthma and cholesterol franchises, and you should get the heck out of his stock.
It's gotten so bad that when Isis Pharmaceuticals (ISIS) got to the mid-$70s I told people I would no longer defend this stock. I said that because I, unlike Friedman, don't have the right to say "get out of my stock," because it isn't. But I was sick and tired of telling people, in 140 characters no less, why I liked it and what drugs it had in the pipeline. Better just to say, "I caught a double, now you go figure out what you own and why you want to own it."
That's why today's a good day for all who own biotech to reassess. Ask yourself, do you know why you own it? What are the catalysts? What's the pipeline look like? Do you understand the CEO's vision and what has to go right and how many different products it has so if one goes wrong it's not the end of the world?
If you don't, this is your chance to exit. This is your chance to know that I am not going to hold your hand. I like certain biotech stocks. I have endlessly identified them. I am not going to do so again. If you don't know them by this point I am not going to pound the table to get you in them because they have all run.
But in the end I want you to think like Gary Friedman of Restoration Hardware. I want you to buy in. And if you don't? What are you waiting for? Hit the road.
Editor's Note: This article was originally published at 11:28 a.m. EDT on Real Money Pro on April 7.
At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held no positions in stocks mentioned.